MANHATTAN (CN) — Ending a rollercoaster week on a partial rebound, the stock market recorded the largest one-day increase since October 2008 on Friday after President Donald Trump declared a national emergency in response to the coronavirus.
The declaration, using a 1970s era law, frees up an additional $50 billion in disaster-relief funds to combat coronavirus and allows the Federal Emergency Management Agency to take over parts of the outbreak response. Pledging to cut many of the existing rules and regulations governing health care, Trump also ordered hospitals nationwide to activate their emergency-preparedness plans.
Congress made moves Friday as well, with House Speaker Nancy Pelosi vowing to pass coronavirus-relief legislation despite no compromise yet with Republicans or the White House. The bill as currently drafted would offer free testing, 14 days of paid sick leave, and up to three months of paid medical leave.
Investors appeared optimistic well before the announcement, with as futures surging Friday to their 5% limits in the Dow Jones Industrial Average, S&P 500, and Nasdaq. At opening bell, the markets opened to similar 5% increases.
That optimism toned down throughout the day, with all three U.S. markets hovering around 2% to 3%, though they jumped to about 4% shortly after initial reports about the national emergency plans.
By the time the president gave his address at 3:30 p.m., the markets again were up about 4% on the day. Stocks rocketed up with an increase of more than 9% across the board, however, by closing bell. The Dow Jones closed at 23,182 points, up nearly 2,000 points from Thursday’s close of 21,200 points.
This week the market has had its highs and lows. U.S. markets saw their sharpest drop since the 2008 financial crisis on Monday, falling 7% in early morning trading that day before a circuit breaker temporarily halted trading.
Trading on Thursday was similarly dire and hit another benchmark: the largest drop in the Dow since the Black Monday market crash of 1987.
Sandwiched in between on Tuesday, the markets recouped some losses, with the Dow closing about 600 points higher than when it opened.
On Friday markets in Europe also showed signs of promise, with the Stoxx 600 and the Financial Times Stock Exchange both increasing nearly 3%, while the DAX index in Germany increased almost one point.
Earlier in the day, however, Asian markets fared poorly. Circuit breakers designed to halt frantic trading were triggered in the Shanghai and Shenzhen markets when sell-offs reached 5%. Trading was temporarily suspended in Manila and Bangkok after losses hit 10%. The Nikkei market, a key indicator for Asian markets, also plummeted, falling 6%.
COVID-19, the name given to the new strain of coronavirus has been confirmed in 132,758 people worldwide, according to figures published Friday afternoon by the World Health Organization. Johns Hopkins University says the United States is home to more than 1,700 cases. There have been at least 41 in the United States, and 4,955 worldwide.
Yet some officials claim the numbers are likely higher. A leading health official in Ohio estimates at least 100,000 people in the state already have coronavirus, while the Centers for Disease Control and Prevention estimates 160 million Americans could end up infected over the course of the epidemic.
More measures are sure to come. In a Friday morning interview on CNBC, Treasury Secretary Steven Mnuchin said, on dealing with the coronavirus, “we’re only in the second inning.”
Additional steps taken by the president Friday included waiving interest on all student loans held by federal agencies until further notice, as well as purchasing “large quantities” of crude oil for the strategic reserve.
The president has told reporters he had other options besides declaring a national emergency. “If I need to do something, I’ll do it. I have the right to do a lot of things that people don’t even know about,” Trump said late Thursday.