Dow pops over 1,600 points on coronavirus slowdown, new stimulus hopes
NEW YORK (AP) - U.S. equity markets soared Monday on chatter that a new round of fiscal stimulus could come by mid-May and could be valued around $1.5 trillion, as reported by FOX Business' Charlie Gasparino.
Also fueling the buying was the latest COVID-19 cases which showed signs of abating in the hardest-hit areas.
The Dow Jones Industrial Average gained 1,627 points, or 7.7 percent, while the S&P 500 and Nasdaq Composite were higher by 6.9 percent and7.3 percent, respectively.
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The number of new cases over the weekend in New York City, the U.S.’s epicenter for the virus, rose by 30.4 percent versus last week, down from a 46.1 percent jump the week prior.
President Trump said at a press conference on Sunday that while there was “light at the end of the tunnel” the next two weeks are going to be difficult.
COVID-19 has infected nearly 338,000 people in the U.S. and killed 9,653, according to the latest figures provided by Johns Hopkins University & Medicine. More than 17,500 people have recovered.
Looking at stocks, JPMorgan Chase CEO Jamie Dimon said in the company’s annual shareholder letter released Monday that suspending the dividend for 2020 cannot be ruled out as the bank looks to conserve cash amid the pandemic. The big banks kick off earnings season next week.
Boeing announced production at plants in the Seattle area would remain suspended until further notice. Work was scheduled to resume later this week after being halted on March 23.
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Delta Air Lines and Southwest Airlines were in focus after Warren Buffett’s Berkshire Hathaway said in a filing late Friday that it unloaded significant portions of its stakes in the two companies. Elsewhere in the space, American and United airlines cut more flights to the New York City area.
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Apple CEO Tim Cook announced Sunday evening that the tech giant has sourced 20 million masks to help aid in the fight against COVID-19. The company is also working to produce face shields for medical workers.
Zoom Video Communications was sharply lower after Credit Suisse downgraded shares, saying their current price was too optimistic for the amount of paid services that will be won from the recent spike in usage.
West Texas Intermediate crude oil for May delivery pulled back 5.12 percent to $26.89 per barrel after Russia and Saudi Arabia postponed a virtual meeting to discuss production cuts. The energy component gained 31.75 percent last week, the most since recordkeeping began in March 1983, according to Dow Jones Market Data Group.
Meanwhile, gold climbed 2.7 percent to more than $1,690 per ounce.
U.S. Treasurys were under pressure, running the yield on the 10-year note up 7.4 basis points to 0.663 percent.
Germany’s DAX led European markets higher, up 5.77 percent, while France’s CAC and Britain’s FTSE gained 4.61 percent and 3.08 percent, respectively.
Asian markets ended mixed as Japan’s Nikkei jumped 4.24 percent and Hong Kong’s Hang Seng added 2.21 percent. China’s Shanghai Composite was closed for holiday.
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