US Market recovers after central banks action

The US equity market finished session higher in volatile trade on Thursday, 19 March 2020, with blue chips clawed into the plus column after government and central banks deployed a flurry of emergency measures to try to buffer the global economy from fallout stemming from the coronavirus pandemic. At closing bell, the Dow Jones Industrial Average gained 188.29 points, or 0.95%, to 20,081.19. The S&P 500 rose 0.47%, or 11.29 points, to 2,409.39. The Nasdaq Composite Index advanced 160.74 points, or 2.3% to 7,150.58. On Wednesday, the Dow ended at 19,898.92, its lowest close since Feb. 2, 2017.

Markets twitched all day following overnight announcements of a 750 billion-euro bond-buying program by the European Central Bank to offset economic pain in the euro zone and a special Federal Reserve backstop for money market mutual funds, typically a risk-free place for investors to store cash. This marked the Fed's seventh major emergency action this week to try to stop strains in funding markets from aggravating what they believe will already be a severe halt to economic growth. Elsewhere, the Bank of England on Thursday cut its bank rate by an additional 15 basis points to 0.1% and increased its bond-buying program.

Financial markets remained volatile, with gyrations this week tied to investors liquidating stocks as well as other assets, including gold and government bonds, while pushing up the U.S. dollar in a dash for cash.

The Fed early Thursday announced the opening of additional, temporary dollar swap lines with central banks in an effort to address a global scramble for dollars, following an announcement late Wednesday of a new Money Market Mutual Fund Liquidity Facility, or MMLF, to assist money-market funds in meeting demands for redemptions by households and other investors. Investors were eyeing these developments, along with ongoing briefings from federal officials as the number of cases of COVID-19 infections rose above 10,000 in the U.S. for the first time Thursday, according to data from Johns Hopkins University. Reports that Congress is discussing a fiscal stimulus package of more than $1 trillion also garnered attention.

Most of the S&P sectors were positive, with consumer discretionary, energy and technology among the winners. Energy got a boost from a record jump in oil prices, which spiked more than 25 percent.

The US dollar, meanwhile, jumped to a record high against the Mexican peso. The greenback also rose against the Japanese yen a traditional safe haven currency to its highest level since February.

West Texas Intermediate crude, the U.S. gauge of oil prices, rose $4.85, or 23.8%, to settle at $25.22 a barrel on the New York Mercantile Exchange, one session after finishing at its lowest level since 2002. In precious metals, gold futures for April rose $1.40, or 0.1%, to settle at $1,479.30 an ounce on Comex.

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