Dow soars nearly 2,000 points as Trump announces new virus measures

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.

Wall Street’s concern and confusion surrounding the coronavirus was in full view Friday, as the Dow’s 1,200-point opening volley deflated, erasing most gains, by lunchtime. Then the blue chip index got its second wind after President Trump declared a state of emergency over the pandemic.

“The day-to-day volatility is a sign that investors don’t know what to do,” David Donabedian, chief investment officer of CIBC Private Wealth Management, wrote in a commentary Friday.“ People are casting about so the period of extraordinary volatility is probably not over. Until we see more calm in the market, and better news on the path of COVID-19, a sustained recovery in markets is unlikely.”

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.

Please enable JavaScript to view this content.

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.

2 thoughts on “Dow soars nearly 2,000 points as Trump announces new virus measures

  1. Either this really comes to pass, as the “experts” are telling us, or there will be a lot of people in about 6 months with a lot of egg on their faces. Of course they will find a way to deflect the finger pointing but the damage will have been done.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.