· Dow rebounds more than 1,000 points as Trump seeks $1 trillion in stimulus for coronavirus fight
Stocks surged Tuesday — rebounding from their worst day in more than three decades — as Wall Street cheered White House plans that could inject $1 trillion into the U.S. economy to cushion the blow of the coronavirus.
The Dow Jones Industrial Average closed 1,048.79 points higher, or 5.2%, at 21,237.31. It briefly dipped below 20,000 for the first time since February 2017 before rebounding. The S&P 500 was up 6% at 2,529.19 while the Nasdaq Composite gained 6.2% to end the day at 7,334.78.
The Trump administration is weighing a fiscal stimulus package of more than $1 trillion that includes direct payments to Americans, according to a source familiar with the matter. Earlier, Treasury Secretary Steven Mnuchin told reporters the government is considering directly sending checks to Americans in the next two weeks. “Americans need cash now,” he said.
Mnuchin added corporations will be able to defer tax payments of up to $10 million while individuals could defer up to $1 million in payments to the Internal Revenue Service. Mnuchin also said President Donald Trump authorized the deferral of $300 billion in IRS payments.
Mnuchin told Republican senators that unemployment could reach 20% if Congress doesn’t enact the trillion-dollar stimulus package he proposed, CNBC reported Tuesday evening, citing a source familiar with the matter.
Treasury yields jumped, with the 10-year U.S. rate breaking back above 1% on news of the big stimulus plan. Yields move inversely to prices. The iShares 20+Year Treasury Bond ETF (TLT) dropped more than 6% as investors fled bonds for stocks.
- Stock futures dipped in overnight trading on Tuesday as the markets remained highly volatile with the government response to the coronavirus fallout unfolding.
Futures on the Dow Jones Industrial Average fell about 400 points, indicating a 600-point loss at Wednesday’s open. The S&P 500 futures were also down about 45 points.
The market rebounded Tuesday from their deepest rout since 1987 as investors grew hopeful that the Trump administration’s massive fiscal stimulus plans will rescue the economy, which is at risk of falling into a recession due to the coronavirus impact.
· European stocks close 2.2% higher after a day of choppy trading; travel sector slides 6%
European markets ended in the green on Tuesday after a day of wild swings, amid hopes of more stimulus as the fast-spreading coronavirus fuels fears of an impending recession.
The pan-European Stoxx 600 provisionally finished 2.2% higher amid a choppy session, having gained 3% at the opening bell before falling into the red. Travel and leisure stocks plunged around 6%, off earlier lows, as shutdowns continue to hammer the sector. Spain’s IBEX, meanwhile, provisionally ended up 9.2%.
· Australia stocks drop 4% as Asia stocks pare gains; Dow rebounds on stimulus hopes
Shares in Asia Pacific were mixed in Wednesday morning trade as stocks on Wall Street bounced back overnight on hopes of stimulus as the country grapples with the coronanvirus outbreak.
Australia markets led losses among the region’s major markets, with the S&P/ASX 200 declining 4.1% as majority of the sectors fell.
In Japan, shares pared some of their earlier gains but remained in positive territory. The Nikkei 225 gained 0.17% while the Topix index added 0.86%.
Japan’s exports declined 1% in February as compared to a year earlier, according to provisional data released by the country’s Ministry of Finance on Wednesday. That compared against a 4.3% drop expected by economists in a Reuters poll.
South Korea’s Kospi turned into negative territory, last slipping 0.43%.
Overall, the MSCI Asia ex-Japan index traded 0.49% lower.
Developments surrounding the global coronavirus outbreak are likely to continue to dominate investor sentiment on Wednesday.
The White House is weighing a fiscal stimulus package worth anywhere from $850 billion to more than $1 trillion, part of which could include direct payments to Americans, a source familiar with the matter told CNBC.
Governments across the world have taken drastic measures as they seek to slow the spread of the virus, with European Union member nations agreeing to close the EU’s external borders to most people from other countries for 30 days. In Asia, Malaysia will close its borders, schools and most businesses from Wednesday until March 31.
Reference: Reuters, CNBC
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