Stocks open higher on Wall Street at end of a brutal week

Author: Associated Press
Trader Jonathan Corpina, left, and specialist Michael Pistillo work on the floor of the New York Stock Exchange, Tuesday, March 10, 2020. Stocks, Treasury yields and oil are clawing back some of the plunge they took a day before, when the S&P 500 had its worst drop in more than a decade. (AP Photo/Richard Drew)

Stocks are opening higher on Wall Street Friday at the end of another turbulent week. The Dow and S&P 500 are each up more than 1%. The gains, if they hold, would mark the first back-to-back advance in more than five weeks. Following several punishing drops, major indexes are still on track for heavy weekly losses for the second week in a row. Investors are weighing the likelihood that the global economy is entering a recession because of the massive shutdowns and layoffs caused by the coronavirus outbreak against steps by central banks and governments to ease the economic pain.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:

Global stock markets and U.S. futures rose Friday on hopes that government and central bank action can help the world economy endure a looming recession caused by the coronavirus.

European markets were as much as 4% higher and Shanghai, Hong Kong and other Asian markets advanced. Seoul surged 7.4%.

Investors were encouraged after seeing more steps by the Federal Reserve and other central banks and governments to support credit markets and the economy.

On Wall Street, the future for the benchmark S&P 500 index rose 2% and that for the Dow Jones Industrial Average gained 2.4%.

Hopes are rising that there will be progress in finding virus treatments and that “a boatload of stimulus by both central banks and governments will put the global economy in position for a U-shaped recovery,” said Edward Moya of Oanda in a report.

On Thursday, the European Central Bank launched a program to inject money into credit markets by purchasing up to 750 billion euros ($820 billion) in bonds. The Bank of England cut its key interest rate to a record low of 0.1% and restarted its own program of money injections into the financial system. Australia’s central bank cut its benchmark lending rate to 0.25%. Central banks in Taiwan, Indonesia and the Philippines also cut rates.

They are trying to reduce the impact of a global recession that forecasters say looks increasingly likely as the United States and other governments tighten travel controls, close businesses and tell consumers and travelers to stay home.

Investors also appeared to be encouraged by reports that China is set to ramp up stimulus spending after the province where the virus emerged in December showed no new infections on Wednesday.

London’s FTSE 100 rose 1.6% to 5,237 and the DAX in Frankfurt advanced 4.2% to 8,968. France’s CAC 40 gained 4.9% to 4,044 and Italy’s FTSE MIB gained 2% to 15,773.

In Asia, the Shanghai Composite Index rose 1.6% to 2,745.62, while Hong Kong’s Hang Seng gained 5.1% to 22,805.07. The Kospi in Seoul advanced 7.4% to 1,566.15 and Australia’s S&P-ASX 200 added 0.7% to 4,816.60 after being up more than 4% at one point.

The U.S. Federal Reserve unveiled measures Thursday to support money-market funds and the borrowing of dollars as investors in markets worldwide hurry to build up dollars and cash as insurance against falling asset prices.

That rush to gather dollars is straining markets, with sellers of even high-quality bonds struggling to find buyers at reasonable prices.

Investors are jumpy due to uncertainty about the size and duration of the impact of the coronavirus and the spreading wave of business shutdowns meant to help contain it.

More than 10,000 people have died. There are more than 244,000 cases worldwide, including nearly 85,000 people who have recovered.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough, and those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems, and recovery could take six weeks in such cases.

Wall Street has bounced up and down by record-setting margins of up to 12% over the past week.

Unease has grown as forecasters say a global recession looks increasingly likely and have cut growth outlooks for the United States, China and other major economies.

In energy markets, benchmark U.S. crude gained 75 cents to $25.97 per barrel in electronic trading on the New York Mercantile Exchange. The contract surged $5.08 on Thursday to settle at $25.91.

Brent crude, used to price international oils, added 77 cents to $29.24 per barrel in London. It rose 14.4%, or $3.59, to settle at $28.47 in the previous session.

The dollar declined to 110.07 Japanese yen from Thursday’s 110.71 yen. The euro rose to $1.0721 from $1.0692.

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