U.S. stocks jumped the most since 2008 as Wall Street staged a furious rally in the waning moments of the session on Friday after U.S. President Donald Trump declared a national emergency to combat the rapidly spreading coronavirus.
Despite the late surge, the major averages still suffered sharp losses for the week.
In a volatile session, all three main indexes jumped more than 6% in early trading before paring to a gain of as little as 0.55% on the S&P 500 before rallying towards the close as Trump made the announcement with industry leaders of about $50 billion in federal aid to fight the disease.
"The initial take, he started talking about $50 billion, the market asked 'where is that going?'" said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
"But as he’s been bringing these various leaders to the front and they have been talking about what they are doing, that is really what the market is responding to."
The indexes were still about 20% below record highs hit in mid-February, and each saw declines of at least 8% for the week. Since hitting the highs, markets have been besieged with big swings in the market, nearly matching as many days with declines of at least 1% as all of 2019. Friday's surge was the biggest one-day percentage gain for the S&P 500 since Oct 28, 2008.
The Democratic-led U.S. House of Representatives will pass a coronavirus economic aid package on Friday, House Speaker Nancy Pelosi said, but it was unclear whether Trump and his fellow Republicans would support it.
The Dow Jones Industrial Average rose 1,985 points, or 9.36%, to 23,185.62, the S&P 500 gained 230.38 points, or 9.29%, to 2,711.02 and the Nasdaq Composite added 673.07 points, or 9.35%, to 7,874.88.
All the main S&P 500 sub-indexes were trading higher, with financial stocks rising 13.23% as expectations of further liquidity measures by the Federal Reserve pushed up Treasury yields, in what has become a very thin market.
Oil also looked set to end the week with a silver lining, as both Brent and WTI crude settled higher after a near-collapse in prices on Monday due to a price war between Saudi Arabia and Russia. The S&P 500 energy index added 8.84%.
Travel stocks, hammered in the rout, were trading higher, with the S&P 1500 airlines index up 11.58%
Hotel operators Marriott International, Hilton Worldwide Holdings and Hyatt Hotels all gained at least 1%.
Boeing jumped 9.92% but suffered its biggest weekly drop in its history on rising concerns about the company's growing cash burn.
Apple rose 11.98% and was among the top boosts to the benchmark S&P 500 and the blue-chip Dow, as the iPhone maker said it would reopen all 42 of its branded stores in China.
Advancing issues outnumbered declining ones on the NYSE by a 4.73-to-1 ratio; on Nasdaq, a 2.95-to-1 ratio favored advancers.
The S&P 500 posted 1 new 52-week highs and 120 new lows; the Nasdaq Composite recorded 2 new highs and 703 new lows.
Volume on U.S. exchanges was 17.10 billion shares, compared to the 13.02 billion average for the full session over the last 20 trading days.
TRUMP CONTINUES TO BASH FED
Meanwhile, Trump in a tweet Friday continued to press a payroll tax cut, which has received a cool response from both fellow Republicans in Congress as well as Democrats.
Any measure must pass both the Democrat-controlled U.S. House of Representatives and the Republican-controlled Senate before Trump could sign it into law.
Trump also took the opportunity to slam the Federal Reserve again, tweeting:
"The Federal Reserve must FINALLY lower the Fed Rate to something comparable to their competitor Central Banks. Jay Powell and group are putting us at a decided economic & physiological disadvantage. Should never have been this way. Also, STIMULATE!"
WORLD STOCKS RISE ON SPENDING HOPES
Stocks across the globe bounced back on Friday but hopes of more central bank stimulus and government spending went only so far and indexes were set to post large weekly drops after days of pandemic-related panic-selling across markets.
Volatility is seen remaining high, with sharp moves expected in both directions and across asset classes.
"There is a lot going on in the market right now and we need the backing of the government more than we already have," said Gene Goldman, chief investment officer at Cetera Investment Management in California.
The pan-European STOXX 600 index rose 1.43% and MSCI's gauge of stocks across the globe gained 1.72% after falling by the largest percentage on record on Thursday.
Earlier, Japan's Nikkei fell 10% before paring losses to close 6% lower. Australia's S&P/ASX200 had its wildest trading day on record, falling past 8% before surging in the last minutes of trade to settle 4.4% higher at the close.
Nikkei futures rose 3.53%.
U.S. Treasury yields rose as liquidity remained scarce even after the New York Federal Reserve's action to make a massive amount of cash available.
Benchmark 10-year notes last fell 25/32 in price to yield 0.9313%, from 0.852% late on Thursday.
Justin Hoogendoorn, head of fixed income strategy and analytics at Piper Sandler in Chicago, said there were "very little bids" in the market.
"It really does scream volatility, scream that there's a lack of liquidity in the marketplace," he said.
Italy, where the COVID-19 death toll shot past 1,000 people, saw its borrowing costs spike by about 73 basis points this week - the most for any week since 1994.
Bond yields rose across the euro zone as investors' expectations grew for fiscal stimulus in the region to combat the coronavirus pandemic.
Oil prices were set for their biggest weekly slide since the 2008 financial crisis despite Friday's gains, as the coronavirus outbreak threatened demand and crude producers promised more supply.
U.S. crude rose 1.52% to $31.98 per barrel and Brent was last at $34.18, up 2.89% on the day.
The dollar extender its previous session's Dollar buying overnight, but the yen felt the pressure of risk-on trading.
Market participants said signs of dollar funding stress persist and policymakers probably need to do even more.
"Underlying concerns regarding the economic fallout from the coronavirus on credit markets broadly remain," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.
"It may be tempting to look for signs of a low in global stocks but with the underlying issue - the coronavirus - still unchecked, we think that is premature at this point," he added.
The dollar index rose 1.217%, with the euro down 0.9% to $1.1082.
The Japanese yen weakened 3.05% versus the greenback at 107.94 per dollar, while sterling was last trading at $1.2296, down 2.19% on the day.
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