Stocks open higher after Fed moves again to support economy

Author: AP
A currency trader watches computer monitors near the screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul, South Korea, Thursday, April 9, 2020. Asian shares are mixed, with Tokyo lower, as an overnight rally on Wall Street faded.(AP Photo/Lee Jin-man)

Stocks are opening higher on Wall Street after the Federal Reserve launched its latest aggressive effort to support the economy through the coronavirus outbreak. The S&P 500 rose 1% early Thursday, adding to a stellar week for the market. The central bank said it took actions to provide up to $2.3 trillion in loans to households, local governments and small and large businesses as the country tips into what economists say may be the worst recession in decades. The Fed’s actions came as welcome news just as the government reported that another 6.6 million people applied for unemployment benefits last week.

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

Stock markets pushed higher in Europe and Asia on Thursday on hopes that the pandemic was reaching a peak in some economies, while the price of oil rose as major crude-producing countries prepared to discuss output cuts.

Benchmarks rose in Frankfurt, London and Hong Kong and ended flat in Tokyo, with investors seemingly reassured by signs that coronavirus deaths and infections may be nearing a plateau in some of the world’s hardest-hit areas.

The optimism helped to temper concern over increasingly gloomy data on unemployment as companies shutter and shed staff in many parts of the world.

The U.S. government was set to report unemployment claims Thursday, with the number expected to shock even after a record nearly 10 million people applied for benefits in the previous two weeks because of business shutdowns from the coronavirus.

Germany’s DAX advanced 0.4% to 10,372 while the CAC 40 in France shed 0.4% to 4,424. Britain’s FTSE 100 picked up 0.7% to 5,719. U.S. shares looked set for gains, with the future for the S&P 500 up 0.4% and that for the Dow industrials gaining 0.2%.

Japan’s Nikkei 225 index was nearly unchanged, ending at 19,345.77, after the central bank governor said the economy faces “extremely high” uncertainty over the likely impact of the pandemic.

That uncertainty was heightened by disagreement between leaders over just how quickly and far to extend precautions meant to contain a surge in coronavirus infections.

The governor of Aichi, home to Toyota Motor Corp.’s headquarters and a prefecture not covered by a declared state of emergency for Tokyo and six other areas, has asked that it also be included. The region has reported dozens of police officers falling sick from the coronavirus.

Elsewhere in Asia, markets were mostly higher. Hong Kong’s Hang Seng added 1.4% to 24,300.33 and the Shanghai Composite index gained 0.4% to 2,825.90. In Australia, the S&P/ASX 200 jumped 3.5% to 5,387.30 and South Korea’s Kospi climbed 1.6% to 1,836.21. India’s Sensex surged 3.3% to 30,884.46.

Recent upward swings in markets have dwarfed declines amid signs that deaths and infections may be nearing a peak or plateau in some of the world’s hardest-hit areas.

That’s led some investors to begin looking to the other side of the economic shutdown that is gripping the world as authorities try to slow the spread of the coronavirus. The S&P 500 has jumped nearly 23% in the last two and a half weeks, building on earlier gains driven by massive amounts of aid promised by governments and central banks for the economy and markets.

“Risk assets continued to rally on the perception that the global economy will open up again quicker than expected,” Stephen Innes of AxiCorp said in a commentary.

The prospect for progress in talks among oil producers has also driven gains, he noted.

“The icing on the cake, … a ‘good’ outcome for oil prices from the OPEC+ meeting, would be a global agreement to cut output … beyond OPEC and Russia, although demand concerns will persist,” Innes said.

Oil prices have been even more volatile than stocks recently as Russia and Saudi Arabia bicker over production levels as demand withers. Oil producers are set to discuss an output cut on Thursday, and an announcement for production cuts to prop up the price of crude is possible.

Benchmark U.S. crude oil rose $1.60 to $26.69 per barrel in electronic trading on the New York Mercantile Exchange early Thursday. It gained $1.46, or 6.2%, to settle at $25.09 a barrel on Wednesday, recovering some of its 9.4% slide from the day before.

Brent crude oil, the international standard, rose $1.34 to $34.18 per barrel. It gained 97 cents, or 3%, to $32.84 a barrel in London.

In currency trading, the dollar fetched 108.82 Japanese yen, down from 108.84 yen on Wednesday. The euro sold for $1.0863, strengthening from $1.0856.

Treasury yields, which have signaled worries about the economic damage from the coronavirus outbreak earlier than the stock market, were relatively steady. The yield on the 10-year Treasury was at 0.73%, from 0.76% late Wednesday.

Nearly 1.5 million cases of COVID-19 have been confirmed around the world, with more than 432,000 of them in the United States. More than 88,000 people have died from the virus, while nearly 330,000 have recovered, according to a tally by Johns Hopkins University.

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