U.S. stocks skyrocketed on Monday, with the Dow setting a single-day point record in a broad-based rebound, after mounting coronavirus fears sent global markets into a week-long swoon.
The powerful rally sent the blue-chip Dow index soaring by more than 1,290 points, which beat the previous record set in December 2018
and snapped a brutal seven-session losing streak. On a percentage
basis, the S&P 500 Index and Nasdaq both saw their biggest move in
over a year.
However, investors aren’t entirely convinced the worst is over, as the COVID-19 outbreak continues its inexorable spread across dozens of countries.
Worldwide, the number of infections are closing in on 90,000, while the
death toll has topped 3,000. At least for now, investors appear to be
ignoring the new cases and deaths that have begun to affect the United
States.
Last week, the rapid spread of coronavirus across countries outside of China rocked global markets,
sending all three of the major indices into a correction in a matter of
days, and pushing safe-haven bond yields to record lows. The sell-off
contributed to nearly $7 trillion in market value being obliterated,
according to S&P/Dow Jones’ Howard Silverblatt — only part of which
was reversed by Monday’s surge.
“We’re not completely out of the woods,” Chris Pollard, head of market strategy at Cowen, told Yahoo Finance in an interview.
“The
market by and large had been telling us this situation was going to
deteriorate, [and] equities only caught on to that last week,” he said,
adding that “any near-term bounce is unlikely to hold.”
Fears
for the global economy are on the rise, as the coronavirus only just
begins to surface in economic data — particularly in China, an epicenter
of the coronavirus. The country’s Caixin/Markit Manufacturing Purchasing Managers’ Index
(PMI) registered at 40.3 for February, representing the lowest reading
in the 16-year history of the survey. Prints below 50 indicate
contraction in a sector.
Also on Monday, the Paris-based Organization for Economic Co-operation and Development lowered its 2020 global economic growth forecast to 2.4% from 2.9% amid the outbreak. That would mark the weakest pace of growth since 2009.
“Under
other conditions, the economic data in the week ahead would set the
tone, but in the current environment, they play second fiddle to market
positioning and anxiety around the Covid-19,” Marc Chandler, managing
director at Bannockburn Global Forex, said Sunday.
“Investors
may be particularly sensitive to downward revisions as it may reflect
the deterioration of conditions as new data was reported,” he added.
Here were the main moves in markets, as of 4:00 p.m. ET:
Officials
in the Seattle area said four new individuals died from the novel
coronavirus, in addition to the two reported over the weekend, public
health officials said Monday. Six deaths in total have occurred in the
U.S. as a result of COVID-19.
The four new deaths were centered among elderly individuals in a nursing facility in Kirkland, Washington.
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2:17 p.m. ET: Stocks touch highs of the day, Dow rallies 800+ points
Stocks continued their march higher during the afternoon session, with the Dow briefly advancing more than 3%.
At the highs of the day, the Dow added as many as 843 points.
Here were the main moves in markets, as of 2:17 p.m. ET:
- S&P 500 (^GSPC): +2.41% or +71.23 points to 3,025.45
- Dow (^DJI): +2.96% or +766.49 points to 26,175.85
- Nasdaq (^IXIC): +2.41% or +208.74 points to 8,775.58
- Crude oil (CL=F): +4.87% or +$2.18 to $46.94 a barrel
- Gold (GC=F): +1.82% or +$28.50 to $1,595.20 per ounce
- 10-year Treasury (^TNX): yielding 1.082%, down 4.4 basis points
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