Yasin Ebrahim
Investing.com – The Dow remained off highs Friday amid growing fears the rapid spread of the coronavirus will plunge the world economy into a recession, even as global financial institutions have rolled out stimulus measures.
The Dow Jones Industrial Average rose 2.79%, or 595 points, after rallying as many as 1,339 points. The S&P 500 added 2.94%, The Nasdaq Composite gained 2.72%.
With the spread of the novel coronavirus, or Covid-19, particularly in Europe and U.S., feared to intensify in the coming weeks rather reach a peak, investor sentiment on stocks remained fragile.
"More cases are now being reported (in Europe) every day than were reported in China at the height of its epidemic,” WHO Director-General Dr. Tedros Adhanom Ghebreyesus said at a press conference at the organization’s Geneva headquarters.
In the U.S., meanwhile, infections have jumped to more than 1,600. President Donald Trump reportedly will declare a national emergency over the coronavirus pandemic in a speech schedule for 3 PM ET (19:00 GMT) today.
With virus outbreak killing more than 5,000 people and reported cases topping 400,000 worldwide, recession fears are gathering pace.
"COVID-19 is expected to roll through the global economy over February, March, and April, generating GDP contractions in most countries for at least one of the two quarters it straddles," said Bruce Kasman, J.P. Morgan’s chief economist. "If our current forecast is realized it seems appropriate to characterize it as a novel-global recession."
The rebound in the broader market following its worst one-day slump since 1987 was driven by financials, mostly banks, underpinned by a rise in Treasury yields.
JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) rose sharply, with the latter up more than 7%.
But energy proved an exception to the rally, despite a slight rise in oil prices, as investor feared gains will likely be capped by a plunge in demand for travel.