Asian shares poised to climb after Wall Street rallies By Reuters


© Reuters. Passersby wearing protective face masks are reflected on a screen displaying stock prices outside a brokerage in Tokyo

By Chris Prentice

(Reuters) – Asian markets looked poised on Tuesday to attempt another day of gains after stocks rallied on signs of a slowdown in coronavirus-related deaths, as oil prices resumed their decline on doubts about a potential Saudi-Russian pact to cut output.

Hong Kong futures were up and Australia futures also rose in early trade.

futures opened lower but were 2.3% above the cash close. The yen eased 0.01% as traders awaited more details on the government’s stimulus package.

On Monday, Japanese Prime Minister Shinzo Abe pledged to roll out an unprecedented economic stimulus, equal to 20% of economic output, as his government vowed to take “all steps” to battle deepening fallout from the coronavirus.

Equity investors kicked off the week encouraged by the slowing death toll from the virus across major European nations, including France and Italy. U.S. stocks rallied on Monday, with the S&P 500, , and all gaining more than 7%.

“Markets started the trading week with a more positive tone following early signs of improvement in virus data for key hot spots,” ANZ Research economists said in a morning note.

Emerging market stocks rose 2.66% at the start of the week. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 2.77% higher.

The governors of New York and New Jersey pointed to tentative signs that the coronavirus outbreak in their states was starting to plateau but warned against complacency, while across the Atlantic British Prime Minister Boris Johnson, who has the COVID-19 disease caused by the virus, was taken to intensive care, driving down the pound.

Reported cases of coronavirus, have exceeded more than 1.27 million globally and 70,395 have died, according to a Reuters tally.

Oil futures resumed their decline, falling more than $1 per barrel on Monday, after Saudi Arabia and Russia delayed a key meeting aimed at resolving growing excess supplies at a time the pandemic has pushed down demand.

Prices had previously notched two sessions of double-digit gains on hopes the producers would meet and agree to production cuts.

Gold prices rose, touching a fresh 3-1/2-week high.

Demand for gold, seen as a store of value, has jumped as governments around the world roll out stimulus packages to soften the economic blow of the pandemic, but effectively diluting their currencies.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



U.S. Treasury to tap Wall Street advisory firms on airline aid: WSJ By Reuters


© Reuters. FILE PHOTO: Video screens are shown built into the backs of passenger seats onboard a Delta Airlines Boeing 737-900ER aircraft in San Diego

(Reuters) – The U.S. Treasury Department plans to hire PJT Partners Inc (N:), Moelis & Co (N:) and Perella Weinberg Partners to advise on the airline portion of Washington’s $2 trillion stimulus bill, the Wall Street Journal reported on Wednesday.

Each firm is likely to advise on aid to one of three subsectors: commercial airlines, cargo carriers and firms critical to national security, such as Boeing Co (N:), the report said, citing people familiar with the matter.

The appointments could be disclosed this week, WSJ said, adding the plans are yet to be finalized.

U.S. House Speaker Nancy Pelosi urged the Treasury earlier in the day to not hold up $25 billion in cash grants approved by Congress last week to airlines for payroll costs.

Congress approved legislation last week authorizing the $25 billion for passenger airlines, as well as $4 billion for cargo carriers and $3 billion in cash for airport contractors like caterers and airplane cleaners.

Moelis declined to comment. Treasury, PJT Partners and Perella Weinberg Partners did not immediately respond to Reuters’ request for comment.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Wall Street slumps after three-day rally as virus threat intensifies By Reuters


© Reuters. Traders work on the floor of the NYSE in New York

By Uday Sampath Kumar and Medha Singh

(Reuters) – Doubts about the fate of the U.S. economy in the face of the coronavirus hammered Wall Street again on Friday, halting its best three-day bounce in almost a century as the number of cases across the country skyrocketed.

The United States surpassed China as the nation with the most number of COVID-19 cases, putting more pressure on lawmakers to flood the country with cash to support businesses and families.

“We have still not fully understood the degree of the economic impact,” said Massud Ghaussy, senior analyst at Nasdaq IR Intelligence in New York.

“Currently, from a policymaker’s perspective, it’s a relative balance between managing the spread of the virus and opening the economy.”

The U.S. House of Representatives is widely expected to clear a $2 trillion economic rescue package after the Senate passed the proposal on Thursday.

The stimulus bill and unprecedented policy easing by the Federal Reserve have set the S&P 500 () for its best week in over a decade, but it is still down 14% in March and on pace for its worst month since the height of the financial crisis.

The Dow Jones (), briefly establishing a bull market on Thursday, is on course for its biggest weekly gain since 1938, largely helped by a stunning four-day rally for Boeing Co (N:).

But with growing fears of a global recession, traders expect more wild swings in financial markets until there are signs of new virus cases peaking and sweeping restrictions placed on entire countries being lifted.

A record 3 million surge in U.S. weekly jobless claims offered the first glimpse of the extent of the economic hit from the outbreak.

“We’re not out of the woods yet on the health or economic crisis,” said Eddie Perkin, chief equity investment officer at Eaton (NYSE:) Vance in Boston.

“It would seem odd to me if the markets fully stabilize before we get more clarity on the health front.”

At 11:18 a.m. ET the Dow Jones Industrial Average () was down 595.76 points, or 2.64%, at 21,956.41, the S&P 500 () was down 61.81 points, or 2.35%, at 2,568.26 and the Nasdaq Composite () was down 188.82 points, or 2.42%, at 7,608.72.

Delta Airlines (N:), United Airlines (O:) and American Airlines (O:) fell between 4% and 8% as U.S. Treasury Secretary Steve Mnuchin said the aid designated for airlines in the package was not a bailout and that taxpayers would need to be compensated.

Boeing shed 10% after gaining as much as 90% this week, as Mnuchin said the planemaker had no intention of participating in the package.

The banking index <.spxbk> fell 5%, tracking U.S. Treasury yields, while oil majors Exxon Mobil (N:) and Chevron Corp (N:) fell about 6%, following a drop in oil prices.

Declining issues outnumbered advancers for a 4.58-to-1 ratio on the NYSE and 3.63-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and one new low, while the Nasdaq recorded four new highs and 19 new lows.



To avoid a repeat of 2008, Main Street America says help needs to be fast By Reuters


2/2
© Reuters. FILE PHOTO: A view of Bourbon Street amid the outbreak of the coronavirus disease (COVID-19), in New Orleans

2/2

By Howard Schneider, Ann Saphir and Timothy Aeppel

(Reuters) – Two weeks. Maybe a month.

Small businesses in the United States say promised help from the federal government and the Federal Reserve is welcome news in the battle to stay afloat through the coronavirus crisis, but needs to hit their bank accounts fast if it’s to make a difference as they barter with landlords, hold onto tax receipts, haggle with vendors and hope furloughed staff can get by on unemployment aid.

“There’s no way that we can pay all the bills that are related to our business – the internet, dishwasher, our compost,” said Terry Sok-Wolfson, who has closed her bar and two Oakland, California-area restaurants already and says the third can survive for perhaps two weeks based on her slender cash reserves. Of 30 employees, 24 have been laid off.

For millions of U.S. small companies, where personal property is often pledged to get business loans and credit cards undergird cash flow, the coming days will be critical in determining whether a historic federal rescue effort limits the economic damage from the ongoing health crisis. Otherwise “Main Street” companies will bear the brunt of an unparalleled and rapid shutdown of the U.S. economy.

How fast loans can be made could determine whether the economic fallout from the current crisis becomes as deep and persistent as it was when a housing bubble collapsed in 2007 and triggered a two-year financial crisis and recession.

Legislation approved by the Senate and expected to pass the House this week includes about $350 billion for lending to small businesses, and nearly $450 billion that the U.S. Federal Reserve could be allowed to expand into more than $4 trillion in help for small and medium-sized firms.

The programs dovetail with Small Business Administration loans meant to let firms cover wages, rents and other expenses through June. Much of that debt is to be forgiven if companies keep employees on the payroll.

Details of a Fed “Main Street Business Lending Program” are expected to be announced soon after the emergency legislation pending in Congress is enacted. Fed Chair Jerome Powell said Thursday it is meant to make the economy’s eventual restart “as vigorous as possible.”

The Fed program is expected to target businesses with between 500 and 10,000 employees, with other steps being taken to aid the largest firms and the SBA helping smaller ones.

Treasury Secretary Steven Mnuchin said Wednesday the aim is to make small business finance as simple as, “you go into a bank, you get a loan instantaneously. It covers your payroll. You hire the people. It’s forgiven.”

Instant lending would be a big shift from the current system, where SBA loans can take 60 to 90 days.

SHORT SHOCK OR GREAT RECESSION

During the last recession, the number of U.S. companies dropped by more than 100,000 from 2008 to 2010 and the number of jobs by 8.5 million, with disproportionate losses among mid-sized firms in the construction and manufacturing industries.

This time could be different as the economic shock hits hardest in service and hospitality industries where public contact is part of what’s being sold in the restaurants, bars, hotels, theaters and retail stores that are the foundation of U.S. consumer society.

The St. Louis Fed estimates that 46 million workers that have “high contact” with the public may become unemployed in coming weeks – with the aim now to make their time off the job as short as public health concerns allow, and with offsetting benefits like unemployment payments.

A record 3.3 million people applied for unemployment benefits last week alone.

The upside: If the shock is short they may return to work quickly in roughly similar roles, unlike 2008 when long-term unemployment also spiked and workers sometimes found they were not qualified for jobs in plants that had been reengineered during the downturn.

Graphic: Fed, Congress aim to skirt a 2008 replay – https://fingfx.thomsonreuters.com/gfx/editorcharts/HEALTH-CORONAVIRUS-USA-SMALLBUSINESS/0H001R8JRCJ9/index.html

A THIN CUSHION

JP Morgan Institute research has shown some resilience among small firms. Event studies involving hurricanes, for example, indicated firms lost dramatic amounts of revenue, but also cut expenses deeply, trimmed their losses, and managed with only a small amount of damage to their cash reserves.

But buffers are slim. In a study of 600,000 firms, only half had enough cash to cover expenses for 27 days. That means it is probably about a month before owners are faced with more debt, more personal financial risk, or a change of career.

Manufacturers, who have undergone sequential shocks since the early 1990s from globalization as well as recession, may actually be better positioned this time around – assuming the downturn is short.

Many are still filling existing and incoming orders, and can better manage the health risks of continued operations given their control over factory floors.

Look Trailers, based in Middlebury, Indiana, has scaled back at four of its six plants and furloughed 400 of 525 workers, who can now claim unemployment benefits.

But chief executive Matt Arnold said the assumption is that demand will build through the slowdown, and that his network of dealers will be able to finance inventory once the rebound begins.

“Everyone has just furloughed people and is waiting for it to turn positive … It’s not like 2008,” he said. His company’s bank credit line is likely enough to get him through the crisis, he said.

By contrast, San Francisco art supply retailer Howard Flax let go all 18 of his employees after officials issued a shelter in place order. He is now bringing back two of them to help run an appointment-only operation from one of his stores. He feels he can negotiate with his landlord, delay insurance payments, and make other adjustments as he anticipates applying for an SBA loan.

He has other problems: Only about two weeks of inventory on hand and a supplier in New Orleans who had to close.

Assuming the shutdown continues, help will need to come soon.

“Taking out a loan is not anything that small businesses want to do,” he said. “That’s going to be the hard part down the road, but if that’s the only option, you do what you got to do.”



Fed boost fails to stem Wall Street rout


(Reuters) – Wall Street’s slide deepened on Monday as the rapidly spreading coronavirus forced more U.S. states into lockdown, eclipsing optimism from an aggressive policy easing by the Federal Reserve and putting the S&P 500 on pace for its worst month since World War Two.

After cutting interest rates to near zero and offering to buy more Treasury bonds and mortgage-backed securities, the Fed will now lend against student loans and credit card loans, as well as back the purchase of corporate bonds and direct loans to companies.

The extraordinary moves briefly lifted U.S. stock index futures more than 3%, but the mounting death toll from COVID-19 and growing evidence of the economic damage to Corporate America quickly sent the main indexes back into the red.

“It’s their bazooka moment, which should be a sign to investors that the Fed will provide any and all liquidity necessary to support the economy through this period,” said Russell Price, chief economist at Ameriprise Financial Service in, Troy, Michigan.

“But quite frankly, the market is just in a waiting period right now until the virus runs its course and some of the therapies and other treatments are able to improve outcomes.”

Investors had hoped the U.S. Senate would clear a $1 trillion-plus coronavirus stimulus package over the weekend, but Democrats and Republicans were still scrambling to come to an agreement.

Ohio, Louisiana and Delaware have now joined New York and California in asking people to stay home, foreshadowing a near halt in economic activity and more pain for U.S. equities, which have already lost more than $9 trillion in value since a record high hit last month.

Goldman Sachs expects an outright contraction in global real GDP in 2020 on the back of a 24% plunge in U.S. real GDP in the second quarter: two-and-a-half times as large as the previous post-war record.

At 11:49 a.m. ET the Dow Jones Industrial Average .DJI was down 908.45 points, or 4.74%, at 18,265.53, while the S&P 500 .SPX was down 107.63 points, or 4.67%, at 2,197.29 and the Nasdaq Composite .IXIC was down 234.88 points, or 3.41%, at 6,644.63.

The energy sector .SPNY fell 5%, tracking a plunge in oil prices. [O/R]

Exxon Mobil (XOM.N) and Chevron (CVX.N) were among the biggest drags on the Dow .DJI.

FILE PHOTO – Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 20, 2020. REUTERS/Lucas Jackson

Hasbro (HAS.O) rose 10.84% after the toy maker’s Chief Executive Officer Brian Goldner said its supply chains were up and running in China.

Declining issues outnumbered advancers more than 5-to-1 on the NYSE and 3-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and 195 new lows, while the Nasdaq recorded two new highs and 401 new lows.

Reporting by Uday Sampath in Bengaluru; Additional reporting by Sinead Carew in New York; Editing by Sagarika Jaisinghani and Arun Koyyur



Source link

As Wall Street reels, veterans recall ’87 while the young look to textbooks By Reuters


© Reuters. A man wears a protective mask as he walks on Wall Street during the coronavirus outbreak in New York

By Noel Randewich and Ross Kerber

(Reuters) – As U.S. financial markets reel from a week of historic swings, industry veterans are drawing on memories from their earliest years on Wall Street, while younger professionals are looking to lessons from history books.

Following an 11-year bull market, many investors have never experienced a market selloff as violent as the near 27% slump in the S&P 500 () from its record highs through Thursday, brought on by fears about the coronavirus pandemic, or Friday’s 9% rebound.

Thursday’s 10% drop on the Dow Jones Industrial Average () was its steepest one-day decline since Oct. 19, 1987, now known as “Black Monday,” when the Dow crashed a record 22.6%.

Clayton Phillips, a 25 year-old financial adviser at Keenan Financial in Boston, said the recent selloffs marked the first major declines he has seen during his two-and-half years in the industry. The best precedents, he said, were financial histories he studied in preparation for a certification exam.

“I’ve been reading about this,” he said. “But it’s different to see it in real time.”

Villere & Co partner George Young began working as a stock broker in 1984 and remembers offers to buy and sell shares of smaller companies all but drying up on Black Monday.

Young said his biggest takeaway from that day is, “If you can stand the volatility, you will be rewarded over time. But you have to take a sanguine and long-term attitude.”

Since the S&P 500 began its tumble from its Feb. 19 record high over fears about the coronavirus and its potential damage to the global economy, markets have been besieged by volatility. The S&P 500 has seen 12 days in 2020 with swings of 1% or more, compared to 15 such days in all of 2019.

Friday’s comeback, after U.S. President Donald Trump declared a national emergency to combat the outbreak, was the biggest one-day percentage gain for the S&P 500 since Oct. 28, 2008.

Many Millennials in recent years embraced stocks, anxious to partake in a bull market that started in the aftermath of the 2008 financial crisis and stretched through February. Too young to remember the market traumas of 2008, many use the Robinhood smartphone app offering no-fee trades that can make it attractive for investors with small amounts of money.

Phillip Perry, a 37-year-old financial planner and colleague of Phillips’ at Keenan Financial, estimated he has spoken with more than 30 clients this week under 30 years old, all of whom were shocked by the market chaos.

“Everybody’s freaking out,” he said. “They’ve literally never seen volatility. The VIX has been has been at historic lows, they pick their Robinhood stocks and feel like really savvy investors because it keeps going up. So their initial question now is, do they get out now, do they stop the bleeding?”

Wall Street’s fear gauge, the VIX () jumped to its highest since the 2008 financial crisis on Friday after logging its biggest-ever one-day surge in history the day before.

Perry said he advises his clients to stay the course, speaking as one of the firms’ more experienced hands.

His views echo those of Donald Selkin, whose first job in the financial industry was trading commodities at Merrill Lynch in 1978. Now chief market strategist at Newbridge Securities in New York, Selkin said his most vivid Black Monday memories are of traders paying extremely high prices for derivatives to hedge against even more volatility in the sessions that followed.

That ended up being a bad bet because the market soon stabilized, with Black Monday in retrospect appearing to be one of modern history’s best buying opportunities.

“My advice to younger people would be to stick your toe in at these lower prices, selectively, and dollar cost average on the down days,” Selkin said.

Shawn Cruz, TD Ameritrade’s 36-year-old manager of trader strategy, in recent days has drawn on lessons he learned at business school about the causes behind the 2008 crisis, and said he has been applying those lessons to predict the coronavirus’ likely impact on the economy.

The suspension of professional sports games, canceled conventions and half-empty restaurants has raised fears – not about whether the longest U.S. economic expansion on record is ending – but about how deep a now presumed recession will be.

“It’s like when you’re in the military and you go through all this training, but it’s not like when there are real bullets flying,” Cruz said.



Gold Loses $1,600 Support as Investors Sell to Save Bleeding Wall Street By Investing.com



By Barani Krishnan 

Investing.com – Gold lost its key $1,600 support on Thursday as investors cashed out their long positions in the yellow metal in a scramble to cover margins and losses on Wall Street amid the U.S. ban on most incoming European travelers.

on New York’s COMEX settled down $52.10, or almost 3.2%, at $1,589.30 per ounce. It fell more than $80 at one point to reach an intraday low of $1,560.65.

It was the third-straight day of losses for gold, which lost about 5% since the start of the week amid the tumble on Wall Street. U.S. stocks .

“Gold prices are in freefall as investors scramble for cash,” said Ed Moya, analyst at online trading platform OANDA. 

“Gold investors are scratching their heads as the fear trade is only seeing steady flows into Treasuries right now. Gold should see some technical buying around the $1,550 area, but if that breaks, we could easily see prices slide another $100 to $1,450.”

With Thursday’s tumble, gold has already lost $110 on the week, putting it on track to a loss of 6.6%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Wall Street tells Trump financial system strong, ready to support borrowers


NEW YORK/WASHINGTON (Reuters) – The U.S. banking industry is strong and ready to help businesses and consumers weather economic fallout from the fast-spreading coronavirus, Wall Street chief executives told President Donald Trump during a meeting at the White House on Wednesday.

FILE PHOTO: U.S. President Donald Trump is followed by Treasury Secretary Steven Mnuchin and other members of his administration as they arive with Senator Majority Leader Mitch McConnell (R-KY) and Senator Roy Blunt (R-MO) for a closed Senate Republican policy lunch meeting to discuss the response to the coronavirus outbreak with senators on Capitol Hill in Washington, U.S., March 10, 2020. REUTERS/Leah Millis/File Photo

“This is not a financial crisis. The banks and the financial system are in sound shape and we are here to help,” said Michael Corbat, chief executive of Citigroup (C.N), during the meeting, which was broadcast from the White House Cabinet Room.

“We want to provide liquidity, we want to lend to our small businesses, we want to be supporting our consumer clients,” he added.

The Trump administration in recent days has tapped regulators to assess financial resilience and unveiled a fiscal stimulus package in response to growing fears the spread of the highly contagious virus could push the U.S. economy into a recession.

Trump convened the executives on Wednesday to hear their views on the economy and proposed stimulus package, which includes potential tax relief, paid family leave and small business assistance. Parts of the plan will require Congressional approval.

“The first thing is to add that fiscal stimulus in the time of stress is absolutely the right answer … Keeping people who are unemployed or under-employed with cash flow and money is key,” said Brian Moynihan, CEO of Bank of America (BAC.N), adding the government needed to fix problems with the healthcare response to the virus, including by bolstering hospital capacity.

Uncertainty over whether a divided U.S. Senate would pass the administration’s stimulus package helped spur another sell-off on U.S. stock markets on Wednesday.

The Dow fell 5.85%, confirming a bear market for the first time since the 2008 financial crisis, as the World Health Organization called the coronavirus outbreak a pandemic. The S&P 500 .SPX lost 140.84 points, or 4.89%.

Chief executives from Wells Fargo & Co (WFC.N), Goldman Sachs Group Inc (GS.N), Truist Financial Corp (TFC.N) and U.S. Bancorp USB. were also in attendance, as was Gordon Smith, co-president and chief executive of JPMorgan Chase & Co’s (JPM.N) consumer and community banking division.

The executives spoke with Trump privately for just over 40 minutes before opening up the meeting to questions from reporters.

Trump took the opportunity to tease parts of the stimulus package which is expected to be unveiled in detail in coming days, including during his national address scheduled for Wednesday night.

“We’ll be doing a lot of additional work with small businesses, adding many billions of dollars and making lots of small business loans,” Trump said, adding “I think a payroll tax would be great … very good for the citizens, the people and longer-term for the country.”

U.S. banking regulators on Monday urged lenders to go easy on consumers and businesses who may have trouble repaying loans if coronavirus-related disruption causes businesses to lose revenue, close temporarily, or lay off staff.

On Wednesday, the executives discussed how they can make the most of that regulatory flexibility through measures such as loan repayment holidays, waiving some fees, and low or no-cost loans.

U.S. President Donald Trump speaks prior to presenting the Presidential Medal of Freedom to retired four-star Army General Jack Keane in the East Room of the White House in Washington, U.S. March 10, 2020. REUTERS/Jonathan Ernst

“All of our plans are designed to protect consumers and small businesses. We’ll be there with forbearance plans and we’ll be there to waive fees,” said Smith.

“Spending among the Millennial generation is holding up very well,” he said, adding that JPMorgan has lent consumers and small businesses more than $26 billion in the last 40 days.

Citi is also waiving monthly account fees and penalties on certificates of deposit for customers affected by the outbreak and Goldman Sachs plans to give customers of its online bank Marcus an extra month to make payments on personal loans without additional interest.

Reporting by Elizabeth Dilts Marshall and Imani Moise in New York, and Pete Schroeder in Washington; additional reporting by Shubham Kalia in Bangalore and Alex Alper and David Lawder in Washington; Editing by Michelle Price, Paul Simao and Tom Brown



Source link

Wall Street tumbles on lack of stimulus details


(Reuters) – U.S. stock indexes dropped sharply on Wednesday after attempting a rebound in the previous session, on skepticism around President Donald Trump’s stimulus plan to combat the coronavirus outbreak.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, New York, U.S., March 11, 2020. REUTERS/Andrew Kelly

The benchmark S&P 500 .SPX index was 17.6% below its all-time peak hit on Feb. 19. If it closes 20% below its record closing high from just three weeks ago, the index would confirm a bear market.

Expectations that Trump would announce “major” stimulus measures helped Wall Street claw back losses on Tuesday from a bruising sell-off at the start of the week on the back of a collapse in oil prices.

Trump met with fellow Republicans in the U.S. Senate on Tuesday and discussed a payroll tax cut, but no concrete measures have been announced.

“This has to be a co-ordinated effort,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

“The President cannot unilaterally take action. He needs Congress, which is the financing arm of the government.”

The rapid spread of the virus has galvanized central banks and governments to roll out measures to cushion its fallout. The Bank of England became the latest central bank to cut interest rates. [MKTS/GLOB]

The U.S. Federal Reserve is expected to cut rates for the second time this month when it meets next week, pressuring Treasury yields further. [US/]

Rate-sensitive U.S. lenders tumbled, with the banks index .SPXBK down 3.4%. The energy sector .SPNY dropped about 4% while all major S&P sectors were down at least 2.1%.

At 9:47 a.m. ET, the Dow Jones Industrial Average .DJI was down 785.32 points, or 3.14%, at 24,232.84 and the S&P 500 .SPX was down 85.23 points, or 2.96%, at 2,797.00. The Nasdaq Composite .IXIC was down 218.11 points, or 2.61%, at 8,126.15.

Nike Inc (NKE.N) fell 5.1%, the most among the blue-chip Dow Industrials components, after rivals Adidas (ADSGn.DE) and Puma (PUMG.DE) flagged a sales hit in China due to the outbreak.

In a bright spot, DXC Technology Co (DXC.N) rose 3.7% after the IT and consulting services provider said it would sell its healthcare technology business to private equity firm Veritas Capital for $5 billion.

Declining issues outnumbered advancers for a 11.03-to-1 ratio on the NYSE and a 6.23-to-1 ratio on the Nasdaq. The S&P index recorded no new 52-week highs and 18 new lows, while the Nasdaq recorded three new highs and 174 new lows.

Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta



Source link

Stimulus hopes buoy Wall Street after rout By Reuters



By Sanjana Shivdas and Medha Singh

(Reuters) – Wall Street rebounded on Tuesday as investors pinned their hopes on policy easing by major central banks and governments after global markets plummeted in the previous session on fears of a coronavirus-driven recession.

Traders now expect the Federal Reserve to cut interest rates for a second time this month, with President Donald Trump piling more pressure by saying that the central bank should bring U.S. interest rates down to the level of “competitor nations.”

Meanwhile, Japan unveiled a $4 billion package to combat the coronavirus outbreak.

More than 114,300 people have now been infected by the coronavirus globally and over 4,000 have died, according to a Reuters tally of government announcements.

“Investors are trying to look for any signs that there is light at the end of the tunnel,” said Adam Sarhan, chief executive officer of 50 Park Investments in New York.

“If they get any sign that this coronavirus is not as devastating economically, then this market can rip higher.”

The three main U.S. stock indexes suffered their worst day since the 2008 financial crisis on Monday as oil prices plunged following pledges by top producers Saudi Arabia and Russia to increase output in an over-supplied market.

The selloff was so sharp it triggered trading halts put in place in the wake of 1987’s “Black Monday” crash, with the blue-chip Dow Jones shedding as much as 2,000 points and the indexes edging toward a bear market.

At 10:12 a.m. ET, the Dow Jones Industrial Average () was up 817.23 points, or 3.43%, at 24,668.25, while the S&P 500 () was up 96.41 points, or 3.51%, at 2,842.97. The Nasdaq Composite () was up 291.00 points, or 3.66%, at 8,241.67.

All the S&P sectors were higher, with the energy sector () rising 5.5% following its worst day on record on Monday. Oil recouped some losses from its biggest one-day decline in 30 years. [O/R]

The rate-sensitive financial sector () climbed 4.4% as U.S. Treasury yields ticked up from all-time lows. [US/]

The CBOE Volatility index (), a gauge of investor anxiety, slipped about 5 points to 49.15, after closing at its highest levels since the financial crisis.

U.S. airlines American (O:) and Delta (N:) suspended their 2020 financial forecasts on the virus impact on demand, but the S&P 1500 airlines index rose 4.9%, tracking broader markets.

Royal Caribbean Cruises (N:) fell 1.3% after joining a slew of travel-related companies to flag virus impact.

Advancing issues outnumbered decliners by nearly 8-to-1 on the NYSE and 4.9-to-1 on the Nasdaq. The S&P index recorded three new 52-week highs and eight new lows, while the Nasdaq recorded four new highs and 103 new lows.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.