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April 8, 2020, 4:51 p.m. EDT

Dow ends 770 points higher as investors eye re-opening of economy, more Fed support

Fed’s balance sheet could reach $10 trillion this year: BlackRock

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By Mark DeCambre, MarketWatch , Joy Wiltermuth


Courtesy Everett Collection
Wall Street watches for data on coronavirus?

U.S. stocks finished sharply higher Wednesday as investors hoped for more Federal Reserve support and a potential sooner-than-expected rollback of containment measures put in place to fight the COVID-19 pandemic.

Bernie Sanders also ended his race for the White House, removing market uncertainty around his campaign promises to rein in Wall Street and big corporations as president.

How did indexes perform?

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.04% rose 779.71 points, or 3.4%, to finish at 23,433.57. The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.24% added 90.57 points, or 3.4%, to end at 2,749.98, and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.43% climbed 203.64 points, or 2.6%, to close at 8,090.90.

On Tuesday, the blue-chip Dow /zigman2/quotes/210598065/realtime DJIA -0.04% lost 26.13 points, or 0.1%, to finish at 22,653.86, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.24% shed 4.27 points, or 0.2%, to end at 2,659.41, and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.43% fell 25.98 points, or 0.3%, closing at 7,887.26.

The Dow is now 20.7% off its record close in February, while the S&P 500 is off 18.8% and the Nasdaq off 17.6%, according to Dow Jones Market Data.

What drove the market?

The White House’s plans for reopening the U.S. economy and an account of the Federal Reserve’s emergency actions taken last month were points of focus for investors.

Minutes for the central bank’s March 15 policy meeting showed that staffers viewed no major economic recovery until next year as a worst-case scenario of the coronavirus outbreak, according to minutes released Wednesday. Fed staffers also fretted about a lack of future ammunition to combat economic distress after the central bank took unprecedented monetary-policy actions last month and slashed rates to a range of 0% to 0.25%.

Following the minutes’ release, Bob Miller, head of Americas fundamental fixed-income at BlackRock, estimated that the Fed’s “do-whatever-it-takes attitude” could swell the central bank’s balance sheet to $10 trillion in the coming year, as the Fed looks to forge a pathway to recovery.

Stocks also rose after Sanders exited the U.S. presidential race on Wednesday, opening the way for Joe Biden to become the Democratic nominee. Sanders’ candidacy has kept investors on edge over the past few months over concerns that his hostility to corporations and plans for universal health coverage could lead to increased regulatory costs and lower earnings growth.

“On the margin, having no longer any possibility of a progressive in the White House, that’s helped,” said Tony Roth, chief investment officer at Wilmington Trust, in an interview with MarketWatch.

This comes as Trump administration officials have expressed a desire to begin to reopen parts of the economy that have been shut to help limit the spread of the viral contagion that has ravaged the globe. When and what form that process takes place may be key to helping investors anticipate the economic rebound ahead.

“This week, we’re starting to see folks shift to being more hopeful that maybe the social distancing measures can be relieved sooner rather than later,” said Michael Arone, chief investment strategist at State Street Global Advisors, in an interview.

But Dr. Anthony Fauci, the expert in infectious diseases and face of the response to COVID-19 on President Donald Trump’s pandemic task force, said a path isn’t clear. “It isn’t like a light switch on and off,” he said in a podcast interview with the Wall Street Journal that aired on Tuesday.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
24,465.16
-8.96 -0.04%
Volume: 255.66M
May 22, 2020 5:09p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,955.45
+6.94 +0.24%
Volume: 2.19B
May 22, 2020 5:09p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
9,324.59
+39.71 +0.43%
Volume: 3.40M
May 22, 2020 5:16p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
24,465.16
-8.96 -0.04%
Volume: 255.66M
May 22, 2020 5:09p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,955.45
+6.94 +0.24%
Volume: 2.19B
May 22, 2020 5:09p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
9,324.59
+39.71 +0.43%
Volume: 3.40M
May 22, 2020 5:16p
loading...
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