Left Menu
Development News Edition

GLOBAL MARKETS-Wall Street powers stocks higher on $2 trillion stimulus; dollar takes a hit

Reuters | Updated: 27-03-2020 02:41 IST | Created: 27-03-2020 02:41 IST
GLOBAL MARKETS-Wall Street powers stocks higher on $2 trillion stimulus; dollar takes a hit

A Wall Street rally led global gains in stocks on Thursday despite a record number of new unemployment filings in the United States, as traders focused on the unanimous passage of a $2 trillion coronavirus relief bill in the U.S. Senate and the possibility of more stimuli to come.

The legislation is intended to flood the country with cash in a bid to stem the crushing impact the virus outbreak has already had on the world's largest economy. Nearly 3.3 million Americans filed for unemployment benefits over the past week, eclipsing the previous record of 695,000 set in 1982. The bill is heading for the House of Representatives for a vote on Friday. "In less than two weeks, we have moved from full employment to a number of job destruction we have never experienced in a period of peace," wrote Christopher Dembik, head of macro analysis at Saxo Bank.

Earlier on Thursday, Federal Reserve Chair Jerome Powell said the U.S. economy is likely in recession already but that reopening businesses should be dictated by the control of the virus' spread, in contrast to the urging by some of President Donald Trump’s advisers for a faster reopening. Trump himself has said he wants the economy to be “roaring” by Easter, in a little over two weeks, even as the U.S. death toll raced on Thursday past 1,000 people and hospitals and government authorities in New York, New Orleans and other hot spots grappled with a surge in cases and a dire shortage of supplies, staff and sick beds.

The astronomical number of jobless filings left some wondering if the stimulus package, despite its size, would be enough. "If these numbers continue for three or four weeks, there will be demand for more fiscal support," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

She said the stock market reaction would suggest "that market participants expect a larger stimulus package or fiscal package from the government than the $2 trillion that has been agreed upon." The Dow Jones Industrial Average surged 1,351.62 points, or 6.38%, to 22,552.17, the S&P 500 gained 154.51 points, or 6.24%, to 2,630.07 and the Nasdaq Composite added 413.24 points, or 5.6%, to 7,797.54.

The pan-European STOXX 600 index rose 2.55% and MSCI's gauge of stocks across the globe gained 4.62%. Global stock markets have lost about a quarter of their value in the last six weeks of virus-driven selling.

While markets have found a measure of sustenance as governments and central banks launch unprecedented support measures, investors have struggled to work out how bad the coronavirus impact would be. "No one is sure how long things are going to be locked down for, how wide the virus will spread in the U.S., what the death toll and hit on the economy will look like," said Salman Baig, portfolio manager at Unigestion.

The combination of the massive jobless claims and stimulus dragged the dollar lower. The dollar index, tracking the unit against six major currencies, fell 1.47%, to post its largest daily percentage decline since early June 2016.

The euro was up 1.41% to $1.1033 and the Japanese yen strengthened 1.49% versus the greenback at 109.60 per dollar, while Sterling was last at $1.2189, up 2.56% on the day. "Although the latest Fed measures have helped calm markets, as long as the COVID-19 crisis continues and the world economy is effectively in lockdown, we would expect markets to remain in turmoil," foreign exchange analysts at Bank of America said in a report on Thursday.

The softer greenback buoyed emerging market currencies, though MSCI's index lost nearly half of the day's gains in late New York trading. Oil fell as fears of plunging demand outweighed expectations of support from the U.S. stimulus.

"Concerns around the demand outlook continue to worsen by the day," said John Kilduff, a partner at Again Capital in New York. "It's just incessant downward pressure." U.S. crude recently fell 5.51% to $23.14 per barrel and Brent was recently at $26.77, down 2.26% on the day.

Prices on U.S. Treasury bonds were little changed and yields traded relatively tightly and within the week's range, suggesting the market had already priced in expectations for abysmal data. Benchmark 10-year notes last rose 2/32 in price to yield 0.8495%, from 0.856% late on Wednesday. The 30-year bond last fell 15/32 in price to yield 1.4388%, from 1.421% late on Wednesday.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.



Workplaces post-COVID 19: Tech innovations to catalyze a remote working culture

Due to lockdowns imposed in several countries, work-from-home culture has literally jumped into almost every company in the world whether they were ready or not....

All party meeting - Blocking dialogue not culture of Bengal, Mamata needs to speak up

If that happens, history will record it as the dark age of Bengal....

Diya Jalao for COVID 19: How Modi put Power Grids and power warriors at risk?

While Prime Minister Narendra Modis staunch supporters are busy in search of hidden science behind the sudden announcement of 9minutes9pm campaign but his ignorance of the actual science has put the nation in another danger. The scientists ...

'Diya jalao' for COVID 19: Modi needs to practice his teachings and control fake news on social media

In his video message to the nation on Friday the Prime Minister talks about peoples collective power to win the invincible. However, he has made no concreate efforts to win over the confidence and represent the collective power of the polit...


Latest News

Scotland’s chief medical officer resigns over coronavirus lockdown trips to her second home

Scotlands chief medical officer has resigned for breaking her own set of warnings against all unjustified travel during coronavirus lockdown in the country after making two trips to her second home, according to media reports. Catherine Cal...

British PM "in good spirits" but to stay in hospital -spokesman

British Prime Minister Boris Johnson had a comfortable night in hospital, is in good spirits and continues to carry out work as leader of the government but will remain in hospital under observation, his spokesman said on Monday.The Prime M...

Amit Shah compliments PM for MPs' salary cut

Union Home Minister Amit Shah on Monday complimented Prime Minister Narendra Modi for the Union Cabinets approval for reduction of allowances and pension of all MPs by 30 per cent, and said the Parliament of the worlds largest democracy sta...

As infections balloon, coronavirus squeezes Europe's armed forces

Military forces across Europe have scaled back operations and imposed stricter rules on personnel to try to stem the spread of the coronavirus among staff who often live and work in close quarters, making them more vulnerable to infection. ...

Give Feedback