From Newsmax

U.S. stock indexes rebounded on Friday as investors bet on another round of fiscal easing to thwart a looming global recession in the face of the coronavirus pandemic.

After Wall Street’s worst daily selloff in more than three decades, indexes recouped some of their losses on optimism that U.S. Democrats and Republicans could announce a stimulus package by Friday.

Travel stocks, which have borne the brunt of the rout, led gains, with the S&P 1500 airlines index up 3.4%.

Cruise operator Norwegian Cruise Line Holdings advanced 6.8%.

“What we’re headed for is a market that should begin to settle down (with) investors now expecting the government to get the economic plan in place and get it into law,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Apple Inc rose 3.9% as the iPhone maker said it would reopen all 42 of its branded stores in China. The stock provided the biggest boost to the blue-chip Dow index.

All the S&P sectors firmed at least 2%, with the heavyweight technology sector leading the gains, up 3.7%. The rate-sensitive financial sector gained 4.5%.

Energy stocks rose 5% as crude prices rebounded, after suffering their worst four-day declines on record.

The CBOE Volatility Index, a gauge for investor anxiety, fell 3.6 points to 71.91 after its biggest-ever one-day surge in history on Thursday.

The Dow and the S&P 500 indexes, which had crashed almost 10% on Thursday, are still headed for their worst week since the financial crisis.

At 9:58 a.m. ET, the Dow Jones Industrial Average was up 509.71 points, or 2.40%, at 21,710.33, after earlier soaring 1,300 right after the opening bell.

The S&P 500 was up 73.08 points, or 2.95%, at 2,553.72. The Nasdaq Composite was up 207.16 points, or 2.88%, at 7,408.58.

Among other movers, software company Oracle Corp jumped 10.5% after topping quarterly profit and revenue expectations and flagging a “minimal impact” from the virus outbreak on its fourth-quarter revenue.

Gap Inc climbed 8.7% as it forecast 2020 profit above market expectations. It also flagged a $100 million sales hit in Asia and Europe from the outbreak.

Advancing issues outnumbered decliners by a 5.72-to-1 ratio on the NYSE and by a 3.41-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and 14 new lows, while the Nasdaq recorded one new high and 153 new lows.

WORLD STOCKS RISE ON SPENDING HOPES

World stocks bounced off their lows on Friday on hopes of more central bank stimulus and government spending, but were still set for their worst week since the 2008 financial crisis, with coronavirus panic-selling hitting nearly every asset class.

European stock markets rose on hopes of a coordinated stimulus package from world governments after several sessions of sustained, heavy losses on expectations of a global recession that could be prolonged.

U.S. stock futures also pointed to a higher open, with Nasdaq futures up 5%.

Italy and Spain meanwhile imposed trading curbs, banning short-selling of dozens of stocks, to stem a market rout triggered by the coronavirus outbreak that saw European stock exchanges post their worst-ever losses on Thursday.

But the MSCI world equity index, which tracks shares in 49 countries, hit a three-year low in Asian hours and is down nearly 16% this week so far — its worst run since October 2008 when Lehman Brothers’ collapse triggered the global crisis.

“Markets are quite prepared for a period of falling output. The real fear is that you get second-round effects that result in a nastier, longer recession in the global economy,” said Investec economist Philip Shaw.

“That is going to be very difficult to escape from given the monetary pedal is very close to the floor in many jurisdictions.”

MSCI’s main European index was up 6.5% by 1145 GMT, after having fallen more than 20% over the previous four sessions.

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.

MSCI’s broadest index of Asia-Pacific shares outside Japan wobbled 0.1% higher by late afternoon after falling more than 5% in morning trade.

The recovery came as central banks from the United States to Australia pumped liquidity into their financial systems and as hopes grew that U.S. Democrats and Republicans could pass a stimulus package on Friday.

ITALIAN RECOVERY

Intervention from three of Europe’s senior policymakers helped staunch the bleeding in Italian government bonds, which had seen the benchmark 10-year yield leap by 55 bps on Thursday — its worst day since November 2011.

On Friday, the 10-year yield — which moves inversely to price — had risen another 20 basis points in early trade, but dropped back again after Italian central bank chief Ignazio Visco said the ECB can front-load bond purchases if needed.

The ECB unveiled fresh stimulus measures but kept interest rates steady on Thursday while its chief Christine Lagarde seemed to put the onus firmly on governments to tackle the coronavirus crisis, sending markets into a tailspin.

“Lagarde has no experience with markets and that became obvious yesterday,” said Christoph Rieger, head of rates and credit research at Commerzbank.

Italy is one of the worst-hit countries in Europe from the spread of coronavirus, with the death toll shooting past 1,000 people and the government ordering blanket closures of restaurants, bars and almost all shops.

Oil steadied on Friday, after having dropped 7% on Thursday on U.S. President Donald Trump’s surprise travel ban and on a flood of cheap supply coming into the market from Saudi Arabia and the United Arab Emirates.

Major currencies stabilized after furious dollar buying overnight, with the euro finding a footing around $1.1200 and the Aussie AUD=D3 recovering to $0.6300.

© 2020 Thomson/Reuters. All rights reserved.

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