U.S. stocks booked their biggest daily gains since Oct. 28, 2008, after President Trump declared a national emergency to combat the coronavirus epidemic, a day after the Dow and the S&P 500 index suffered their biggest one-day plunge since the October 1987 crash.
The national emergency declaration unleashes $50 billion of funds to help contain the COVID-19 pandemic, but financial market conditions are expected to remain volatile in the wake of this week’s global market carnage.
How did markets fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +2.05% soared 1,985 points, or 9.4%, to settle at 26,79.16, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.36% rose 230.38 points, or 9.3%, to close at 2,711.02. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.78% gained 673.07 points, or 9.4%, to end at 7,874.88.
On Thursday, the Dow and S&P 500 suffered their worst day since the “Black Monday” crash of Oct. 19, 1987. The Dow plunged 2,352.60 points, or 10%, to end at 21,200.62. The S&P 500 shed 9.5%, or 260.74 points, to close at 2,480.64. The Nasdaq tumbled 9.4%, or 750.25 points, to finish at 7,201.80.
The last time the S&P 500 had back-to-back 9% moves in October 1929 and the last time the Dow had back to back 9% moves was on Feb. 13, 1932.
For the week, the Dow was down 10.4%, the S&P 500 index booked an 8.8% decline, while the Nasdaq saw an 8.2% weekly plunge.
What drove markets?
President Trump declared a national emergency Friday afternoon, opening up a $50 billion spigot of funding to combat the coronavirus pandemic, while ramping up testing and expanding the ability of hospitals and doctors to provide treatments for the disease.
“This will pass through and we will be even stronger for it,” Trump said in an afternoon White House press conference, flanked by heads of top U.S. retailers and pharmaceutical providers.
“I think they’ll pull out all the stops to prevent the economy from falling hard from this,” said Bruce Bittles, chief investment strategist at RW Baird &Co., in an interview with MarketWatch, following the declaration.
“I think there are a lot more fiscal measures you’ll see next week,” he said.
Trump also said interest payments will be waived on the government’s share of the near $1.6 trillion pile of student debt and quantities of strategic crude oil reserves will be bought at recently, sharply lower prices. “We are going to fill it right up to the top,” Trump said of the reserves.
House Speaker Nancy Pelosi told Democrats after the bell Friday that she had reached a deal with the White House on a coronavirus relief package, with voting to pass the bill expected Friday evening. The infectious disease was first identified in Wuhan, China, in December and has infected about 128,000 people world-wide.