Wall Street rises on Fed's $2.3 trillion rescue plan

By Uday Sampath Kumar and Shreyashi Sanyal (Reuters) - Wall Street rose for the third time in four days on Thursday as the U.S. Federal Reserve rolled out a massive $2.3 trillion program to bolster local governments and businesses hammered by the coronavirus outbreak

Reuters April 10, 2020 00:06:47 IST
Wall Street rises on Fed's $2.3 trillion rescue plan

Wall Street rises on Feds 23 trillion rescue plan

By Uday Sampath Kumar and Shreyashi Sanyal

(Reuters) - Wall Street rose for the third time in four days on Thursday as the U.S. Federal Reserve rolled out a massive $2.3 trillion program to bolster local governments and businesses hammered by the coronavirus outbreak.

In what is likely to be its largest rescue effort ever, the Fed said it would work with banks to offer 4-year loans to companies of up to 10,000 employees and directly buy bonds of states and more populous counties and cities.

"(The Fed's move) should give some confidence to investors, that the risks this time around are maybe not the same as the risks in the financial crisis," said Randy Watts, chief investment officer at O'Neil Global Advisors.

"While this rally has been impressive, the market probably is a little bit of ahead of itself and we would not be surprised to see a pullback from here."

The financial index <.SPSY> rose 6.09%, providing the biggest boost to the S&P 500 <.SPX> as banks rose sharply on the Fed's backstop. J.P. Morgan rose over 9%, leading gains on the Dow <.DJI>.

The defensive real estate <.SPLRCR> and utilities <.SPLRCU> sectors also jumped more than 5%.

The S&P 500 has gained near 13% in the holiday-shortened week on early signs of the outbreak hitting a peak and aggressive global stimulus, but it remains about 17% below its record high as lockdown measures hamper business activity.

If gains hold through the day, the benchmark index would have logged its best week since October 1974.

While public health experts stressed the need to keep people apart to contain the contagion, the restrictions have strangled the economy and sparked widespread production cuts, layoffs and projections of a severe recession.

"This week brought early signs that the restrictions put in place over recent weeks are flattening the epidemic curve in the U.S.," said Michael Pearce, senior U.S. economist at Capital Economics.

"But set against that good news, there are clearer signs that the hit to employment has been harder than initially anticipated."

A staggering 16.8 million Americans have filed for unemployment benefits in the last three weeks, with weekly new claims topping 6 million for the second straight time last week.

Exxon Mobil , Marathon Oil and Apache Corp rose between 3% and 20% tracking oil prices, which gained as OPEC and other crude producers work on a deal to drastically cut output in response to a collapse in global demand.

At 1:09 p.m. ET the Dow Jones Industrial Average <.DJI> was up 523.97 points, or 2.24%, at 23,957.54, the S&P 500 <.SPX> was up 62.48 points, or 2.27%, at 2,812.46 and the Nasdaq Composite <.IXIC> was up 104.19 points, or 1.29%, at 8,195.09.

Walt Disney Co jumped 4.97%, as the company said its Disney+ streaming service had attracted more than 50 million paid users globally.

Advancing issues outnumbered decliners for a 11.27-to-1 ratio on the NYSE AND a 4.48-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and no new low, while the Nasdaq recorded 14 new highs and eight new lows.

(Reporting by Uday Sampath and Shreyashi Sanyal in Bengaluru; Editing by Sagarika Jaisinghani, Arun Koyyur and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.