Stocks add to gains as Trump unveils new virus measures

Andrew Cummings
March 18, 2020

USA stocks jittered higher and then erased those gains at the start of trading Tuesday, the day after plunging to their biggest loss in more than three decades, as uncertainty about how badly the coronavirus pandemic will hit the economy continues to dominate markets.

U.S. stock indexes plunged about 7 percent on Monday, as the Federal Reserve's drastic interest rate cut to near zero stoked fears of a coronavirus-driven recession.

Apple Inc, Microsoft Corp and Facebook Inc fell more than 7 percent each and were the biggest drags on the S&P 500.

Despite emergency measures taken by the Federal Reserve yesterday, Wall Street had yet another rough trading day - with the Dow Jones Industrial Average sliding by almost 3,000 points.

"I think that people in the market should be very thrilled", Trump said.

Many investors expect markets to remain volatile as long as the number of new infections keeps accelerating.

India's S&P BSE SenseX index declined 8%, while benchmark indexes in Singapore and Indonesia retreated 5.2% and 4.4% respectively.


They say the Fed's move made investors believe the situation is more serious than they had imagined.

The S&P 500, which dictates the movements of workers' 401 (k) accounts much more than the Dow, is still roughly 25% below its record set last month and is back to where it was in late 2018, erasing most of the best year for stocks in decades. The S&P 500 climbed 6 percent to claw back a little less than half of its historic loss from the day before.

At the opening bell, the Dow Jones Industrial Average rose 298.53 points, or 1.48 percent, to 20,487.05.

The losses wiped out the gains from Friday's dramatic rally, the latest development in a market that has whipsawed amid what is seen as the greatest economic threat since the 2008 global financial crisis.

The S&P 500 was down 0.2% shortly after 7 a.m.

Oil prices continued their nosedive as a price war between major producers Saudi Arabia and Russian Federation added to sliding crude demand caused by the virus. South Korea and Kuwait both lowered rates, while Russian Federation and Germany were throwing together multi-billion dollar anti-crisis funds.

Brent North Sea oil plunged more than 10pc to a four-year low, as WTI fell below $30 per barrel.


Manufacturing data released from China over the weekend were a troubling indication of what could happen in the USA, with retail sales down by 20.5 percent and industrial output down by 13.5 percent.

Shanghai shed 3.4pc after the release the scale of the crisis was laid bare by data showing Chinese industrial production for January and February shrank 13.5pc, the first contraction in around 30 years.

Manufacturing activity in NY state also plunged in March by the most on record to its lowest level since 2009, offering an early glimpse of the coronavirus' damaging impact on the US economy.

Others say liquidity in some financial markets is starting to fall because there is such a high degree of uncertainty, meaning even some traditional safe-havens may not be that safe.

The Japanese yen strengthened 1.91% versus the greenback at 105.92 per dollar.

USA gold futures settled 2% lower at $1,486.5 an ounce.


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