Late surge lifts Wall Street stocks as coronavirus hits economy

NEW YORK, USA – Wall Street stocks concluded a bruising week on a positive note Friday, March 13, rallying as President Donald Trump declared the coronavirus a national emergency and set the stage for more testing in the United States.

A late-afternoon surge enabled the Dow to finish almost 2,000 points higher, or 9.4%, at 23,185.62, nearly reversing the losses from Thursday, March 12, when the blue-chip index suffered its worst session since 1987.

The furious rally at the end showed volatility remains elevated in markets, a trend also apparent in Europe where major bourses gained but finished well below session highs as the World Health Organization (WHO) targets Europe as the new epicenter of the pandemic.

WHO chief Tedros Adhanom Ghebreyesus said the continent now had “more reported cases and deaths than the rest of the world combined, apart from China.”

He described it as a “tragic milestone,” and warned that it was impossible to say when the virus would peak globally.

The overall death toll jumped to more than 5,000 across the planet, including nearly 1,500 in Europe, with total infections topping 140,000 across the planet.

After initially being viewed as a China-centered problem, the virus has become a global pandemic, raising fears of a global recession as major economies grind to a halt and professional sports leagues and entertainment events are canceled.

“In mere weeks, the market has shifted gears from a transitory health scare to a full-blown global recession,” said AxiCorp market strategist Stephen Innes.

“Global supply chains are no longer just ‘disrupted’ but are now in the process of shutting down completely,” he added.

Global markets melted down especially hard on Thursday, with some bourses suffering their worst declines in history.

That set the stage for Friday’s bounce, but the gains in Europe did not approach the losses of the prior day.

Milan was up 17% at one point, but ended the day with a 7% gain.

London, Frankfurt, and Paris, which all posted double-digit losses on Thursday, were up over 7% at one point.

London eventually closed up 2.5%, Paris up 1.8%, and Frankfurt up 0.8%.

Markets have wiped trillions of dollars off the globe’s combined company valuations in just a few weeks.

More testing in US

Back in the US, markets cheered Trump’s late-afternoon announcement where the president, accompanied by health care and retail executives, announced plans to radically increase testing for the virus as the country tries to control a public health crisis that largely shut down the economy in China and Italy.

Further testing is expected to lead to a surge in US cases as well, a dynamic that could challenge markets again next week.

Art Hogan, chief market strategist at National Securities, said Trump’s announcement met expectations as far as laying out a health care response to the crisis.

“It’s the first time we’ve heard any details that have been elucidated as far as concrete steps,” Hogan said.

The measures come on the heels of emergency steps by the Federal Reserve to boost market liquidity and cut interest rates.

Markets are also anticipating a US fiscal response to the crisis, and after trading ended Democratic House leader Nancy Pelosi said she’d reached an agreement with the Trump administration on a stimulus bill. – Rappler.com