Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Wall Street advances as stimulus hopes calm recession fears

Published 03/10/2020, 02:52 PM
Wall Street advances as stimulus hopes calm recession fears
US500
-
DJI
-
CVX
-
AMZN
-
MRO
-
UPS
-
LCO
-
CL
-
IXIC
-
SPSY
-
SPNY
-
SPLRCT
-

By Stephen Culp

NEW YORK (Reuters) - Wall Street reversed course on Tuesday, pulling back from the brink of bear market confirmation as bargain hunting and stimulus hopes calmed investors' fears of recession and uncertainties surrounding the coronavirus.

All three major indexes advanced the day after equities markets suffered their biggest one-day losses since the 2008 financial crisis.

The S&P 500 and the Nasdaq are now about 18% below the closing record highs reached on Feb. 19. They would have to pass the 20% mark to confirm a bear market.

U.S. President Donald Trump said he will take "major steps" allay market fears by asking congress for a fiscal stimulus package to include a payroll tax cut among other measures.

"Fiscal policy is calling the shots today," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

"Clearly some investors are bottom fishing, thinking equities have dropped too much too fast," added Carter. "(But others are) still trying to understand the probability of real fiscal stimulus from Washington."

"There's still a lack of clarity as far as what we're going to get," Carter added.

Additionally, market participants largely expect the U.S. Federal Reserve to cut interest rates for the second time this month at the conclusion of next week's two-day monetary policy meeting in an effort to shore up the U.S. economy against growing global uncertainties, including the coronavirus.

Global markets have been rattled in recent weeks by news of the rapidly-spreading coronavirus, which has caused widespread supply chain disruption, hobbled the travel industry and prompted drastic containment measures in Italy and elsewhere.

Market uncertainties surrounding COVID-19 were exacerbated over the weekend as Saudi Arabia and Russia scrapped their supply pact and pledged to increase crude oil production.

But oil prices rebounded from their largest percentage drop since the 1991 Gulf War, with front-month Brent crude (LCOc1) rising 7.5% after Russia indicated it was open to talks with OPEC.

Energy stocks (SPNY) began to recover from their worst decline on record, advancing 1.9%.

The Dow Jones Industrial Average (DJI) rose 275.22 points, or 1.15%, to 24,126.24, the S&P 500 (SPX) gained 34.01 points, or 1.24%, to 2,780.57 and the Nasdaq Composite (IXIC) added 104.01 points, or 1.31%, to 8,054.69.

Of the 11 major sectors of the S&P 500, nine were trading in the black, led by tech (SPLRCT) and rate-sensitive financial (SPSY) shares.

Financials jumped 2.7% after suffering their worst day in more than a decade as U.S. Treasury yields bounced off record lows.

United Parcel Service Inc (N:UPS) gained 4.0% as Stifel upgraded its shares to "buy," while Amazon.com Inc (O:AMZN) rose 2.0% on Cowen & Co's price target increase.

Shares of Chevron Corp (N:CVX) and Marathon Oil Corp (N:MRO) rose 3.8% and 13.2% after the oil companies and their peers announced cost reduction efforts to combat plunging crude prices.

Advancing issues outnumbered declining ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favored decliners.

The S&P 500 posted 3 new 52-week highs and 100 new lows; the Nasdaq Composite recorded 6 new highs and 548 new lows.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.