Promise of Aid Gives Needed Lift to Downtrodden Markets

MANHATTAN (CN) — The wild swings in the market tempered, at least on Thursday, with markets ending in a mild rebound.

The Dow Jones Industrial Average, S&P 500 and Nasdaq all fell roughly 2% Thursday morning but later rallied, with the Dow closing at 20,088 points, back over the 20,000-point hump a day after a sell-off in the markets left it at nearly pre-2017 levels.

Christina Pae takes a picture of the “Fearless Girl” statue, now donning a surgical mask, outside the New York Stock Exchange on Thursday. (AP Photo/Kevin Hagen)

The S&P also increased half a point, while the Nasdaq saw even bigger gains, up more than 2.3% by the market’s close.

Earlier, European markets closed on a positive note following news the European Central Bank would buy up about $820 billion in securities later this year to help companies. Markets in France and Germany closed 2 points up, while the pan-European Stoxx 600 rose almost 3%.

The upswing follows an incredibly volatile market that has seen 500-point gains followed a day later by 1,500-point declines.

At a briefing with the White House coronavirus task force this morning, President Trump stressed that, while the economy is suffering now, “things will go very nicely” once the spread of coronavirus is halted.

The president Trump touted the Food and Drug Administration’s forthcoming approval of malaria drugs to help treat Covid-19, saying the approval “could be a game changer” in dealing with the virus. A vaccine could take up to a year or more until being ready, officials said.

“Our big war, it’s not a financial war, it’s a medical war,” Trump said.

The president passed a $100 billion stimulus package a day earlier, saying it will deliver aid to small businesses, paid sick leave and medical leave for affected workers, and free testing for the coronavirus.

A third, much larger stimulus is already in the works. Phase III, as it’s being called, would likely include as much as $500 billion in direct payments to American taxpayers, as well as greater help for the ailing airline industry.

The president also has directed federal housing authorities to suspend all foreclosures and evictions through April, while immigration officials said they would stop making arrests of undocumented aliens until after the coronavirus crisis had ended.

Trump has said he is “OK” with prohibiting stock buybacks by companies that receive federal assistance. “It’s very hard to tell them not to, but I would tell them not to, I would say I don’t like it,” Trump said.

Earlier in the day, the Federal Reserve announced it would create “swap lines” with nine other central banks to help investors exchange dollars for foreign currency.

The currency swaps will be capped at $60 billion for central banks in Australia, Brazil, South Korea, Mexico, Sweden and Singapore, with $30 billion caps in Denmark, Norway and New Zealand.

Covid-19, the new strain of coronavirus responsible for a global pandemic, has now affected more than 236,000 worldwide and 11,000 confirmed throughout the entire United States, according to data compiled by Johns Hopkins University.

An estimated 9,800 have died globally from the virus, with now more than 150 deaths in the United States, data show.

Unemployment numbers also have skyrocketed as a result of the virus, with some state websites reportedly crashing as a result of high traffic.

The Department of Labor announced Thursday that it saw 281,000 seasonally adjusted unemployment claims during the week ending March 14, the highest reported since September 2017.

Those numbers are likely to explode. Estimates from the United Nations painted a bleak picture of anywhere from 5.3 million to nearly 25 million unemployed worldwide.

Former Trump economic advisor Gary Cohn warned in an interview on CNBC on Thursday that, “I believe that we are going to have massive unemployment very, very quickly.”

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