US stocks bounced back Friday after coronavirus panic caused Wall Street’s worst selloff in more than three decades.
The Dow Jones industrial average spiked as much as 1273.59 points, or 6 percent, in early trading after plunging 10 percent, or 2,352.6 points, Thursday as investors clamored for a fiscal stimulus to address the coronavirus outbreak’s economic impact.
The S&P 500 jumped as much as 5.9 percent in the opening bell after joining the Dow in bear market territory the day before, while the Nasdaq composite climbed as much as 6 percent. The indexes lost 9.5 percent and 9.4 percent, respectively, in Thursday’s selloff.
The early surge came as Treasury Secretary Steven Mnuchin said the Trump administration and Congress were close to a deal for a stimulus package. President Trump failed to deliver concrete details of a stimulus in his Wednesday night speech on the coronavirus crisis, which analysts said was part of the reason for Thursday’s tumble.
“I think we’re very close to getting this done,” Mnuchin told CNBC Friday morning. “The president is absolutely committed that this will be an entire government effort, that we will be working with the House and Senate.”
But it remains to be seen whether the market gains will hold and how investors react to whatever stimulus package is rolled out. The Federal Reserve’s plan to inject $1.5 trillion in short-term funding into financial markets failed to stop Thursday’s huge rout.
“Washington’s politicians need look no further than themselves when searching for scapegoats for the week that has been,” Jeffrey Halley, senior currency analyst at OANDA, wrote in a Friday commentary. “More worryingly, it will inevitably slow the response from the government that is needed, just when it was needed the most.”
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