Wall Street jumps on expectations for huge US stimulus

2020-03-18 05:40
Wall Street (Photo: AFP)

Wall Street (Photo: AFP)

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Wall Street stocks rallied on Tuesday on expectations for massive federal stimulus to address the economic hit from the coronavirus, partially recovering some of their losses from the prior session.

The Dow Jones Industrial Average finished up 5.2 percent or around 1,050 points at 21,237.38, a day after shedding almost 3,000 points.

The broad-based S&P 500 gained 6.0 percent to 2,529.19 while the tech-rich Nasdaq Composite Index jumped 6.2 percent to 7,334.78.

US Treasury Secretary Steven Mnuchin said the White House is focused on a stimulus that would include sending checks to Americans within the next two weeks.

The White House is targeting an $850 billion (R14 trillion) package, the Washington Post reported.

The efforts aim to lift the economy at a time when more and more areas of the United States are shutting down economic activity to combat the spread of the virus.

Karl Haeling of LBBW said the stimulus announcements boosted sentiment somewhat, but that there was still a lot of uncertainty.

"We have no idea what is going to happen over the short term," Haeling said. "In general, the lack of any real good idea about what earnings are going to be is just keeping people out of the market."

Stocks also got a boost from the latest emergency effort by the Federal Reserve, which unveiled a new credit facility aimed at the commercial paper market, which finances things like auto loans and home mortgages.

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