Stocks surged Friday, recouping much of a historic plunge, as President Donald Trump announced new measures to fight the COVID-19 virus.
The Dow Jones industrial average rocketed nearly 2,000 points, or 9.4%, closing at 23,186. The S&P 500 and the NASDAQ jumped 9.3%.
The gains Friday came in another day of turbulent trading fueled by heightened fears of a global recession from the coronavirus. Thursday’s drop was the worst for the U.S. market since the Black Monday crash of 1987. An early surge in buying subsided around midday Friday, then regained momentum in the afternoon.
Investors have been clamoring for strong action from the U.S. government to combat the economic impact of the virus outbreak. News that the White House and Congress are close to announcing an agreement on a package to provide sick pay, free testing and other resources helped boost the market.
Emergency action by the Federal Reserve to free up $1.5 trillion to smooth operations of the massive U.S. Treasury market and an Oval Office speech from President Trump outlining the beginning of the White House’s response to the U.S. outbreak sent investors into complete panic Wednesday, resulting in a 10 percent decline for the Dow and the week’s second forced halt to trading.
“The coronavirus likely tips us into a recession because we were hit with a one-two punch from the virus,” said Dan Niles of AlphaOne Capital Partners, a San Francisco hedge fund. “It is both demand and supply destruction, unlike 9/11 or the tech bubble bursting, which was just demand.”
Asian markets were gutted by losses Friday, with Japan’s Nikkei 225 shedding more than 6 percent, while Hong Kong’s Hang Seng Index closed down about 1.1 percent. But European markets shared in the rebound after one of their worst days in history, boosted by intervention plans from the European Central Bank.
The benchmark Stoxx 600 index was up 4.4 percent in midday trading. Earlier this week, the World Health Organization designated the coronavirus a global pandemic. The disease has sickened more than 135,000 worldwide and killed nearly 5,000.