U.S. stocks skyrocketed on Monday, with the Dow setting a single-day point record in a broad-based rebound, after mounting coronavirus fears sent global markets into a week-long swoon.
The powerful rally sent the blue-chip Dow index soaring by more than 1,290 points, which beat the previous record set in December 2018 and snapped a brutal seven-session losing streak. On a percentage basis, the S&P 500 Index and Nasdaq both saw their biggest move in over a year.
However, investors aren’t entirely convinced the worst is over, as the COVID-19 outbreak continues its inexorable spread across dozens of countries. Worldwide, the number of infections are closing in on 90,000, while the death toll has topped 3,000. At least for now, investors appear to be ignoring the new cases and deaths that have begun to affect the United States.
Last week, the rapid spread of coronavirus across countries outside of China rocked global markets, sending all three of the major indices into a correction in a matter of days, and pushing safe-haven bond yields to record lows. The sell-off contributed to nearly $7 trillion in market value being obliterated, according to S&P/Dow Jones’ Howard Silverblatt — only part of which was reversed by Monday’s surge.
“We’re not completely out of the woods,” Chris Pollard, head of market strategy at Cowen, told Yahoo Finance in an interview.
“The market by and large had been telling us this situation was going to deteriorate, [and] equities only caught on to that last week,” he said, adding that “any near-term bounce is unlikely to hold.”
Fears for the global economy are on the rise, as the coronavirus only just begins to surface in economic data — particularly in China, an epicenter of the coronavirus. The country’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) registered at 40.3 for February, representing the lowest reading in the 16-year history of the survey. Prints below 50 indicate contraction in a sector.
Also on Monday, the Paris-based Organization for Economic Co-operation and Development lowered its 2020 global economic growth forecast to 2.4% from 2.9% amid the outbreak. That would mark the weakest pace of growth since 2009.
In the U.S., Wall Street is now banking on the Federal Reserve to come to the rescue with a series of rate cuts — a theme that will likely be reinforced amid a week chock-full of market-moving economic data, some of which may begin to hint at the havoc the COVID-19 virus is wreaking on the global economy.
“Under other conditions, the economic data in the week ahead would set the tone, but in the current environment, they play second fiddle to market positioning and anxiety around the Covid-19,” Marc Chandler, managing director at Bannockburn Global Forex, said Sunday.
“Investors may be particularly sensitive to downward revisions as it may reflect the deterioration of conditions as new data was reported,” he added.
4:00 p.m. Dow jumps more than 1,200 points or 5% in rebound
Here were the main moves in markets, as of 4:00 p.m. ET:
S&P 500 (^GSPC): +4.61% or +136.30 points to 3,090.52
Dow (^DJI): +5.10% or +1,296.81 points to 26,706.17
Nasdaq (^IXIC): +4.49% or +384.80 points to 8,952.17
Crude oil (CL=F): +5.56% or +2.49 to 47.25 a barrel
Gold (GC=F): +1.29% or +20.20 to 1,586.90 per ounce
10-year Treasury (^TNX): -3.46% or -0.0390 to 1.0880
2:29 p.m. ET: Officials in Seattle area report four additional coronavirus deaths
Officials in the Seattle area said four new individuals died from the novel coronavirus, in addition to the two reported over the weekend, public health officials said Monday. Six deaths in total have occurred in the U.S. as a result of COVID-19.
The four new deaths were centered among elderly individuals in a nursing facility in Kirkland, Washington.
2:17 p.m. ET: Stocks touch highs of the day, Dow rallies 800+ points
Stocks continued their march higher during the afternoon session, with the Dow briefly advancing more than 3%.
At the highs of the day, the Dow added as many as 843 points.
Here were the main moves in markets, as of 2:17 p.m. ET:
S&P 500 (^GSPC): +2.41% or +71.23 points to 3,025.45
Dow (^DJI): +2.96% or +766.49 points to 26,175.85
Nasdaq (^IXIC): +2.41% or +208.74 points to 8,775.58
Crude oil (CL=F): +4.87% or +$2.18 to $46.94 a barrel
Gold (GC=F): +1.82% or +$28.50 to $1,595.20 per ounce
10-year Treasury (^TNX): yielding 1.082%, down 4.4 basis points
1:57 p.m. ET: Apple shares rise more than 6%
Apple shares rose more than 6% Monday, outperforming against the S&P 500 and Dow during the intraday session.
The company’s shares gained following an Oppenheimer analyst’s note saying that Apple is better positioned than competitors to deal with the coronavirus, Reuters reports.
1:35 p.m. ET: Amy Klobuchar to drop out of U.S. presidential race, AP reports
Amy Klobuchar is ending her bid to become the 2020 Democratic presidential nominee, the Associated Press reported Monday.
According to the report, the Minnesota senator is set to fly to Dallas to join Democratic candidate Joe Biden at his rally Monday night. Klobuchar will reportedly endorse Biden for the nomination.
12:18 p.m. ET: Dow jumps 600+ points, or more than 2%, as rebound rally accelerates
The S&P 500, Dow and Nasdaq each surged more than 2% after last week’s sell-off. At the highs of the session so far, the Dow was up as many as 795.7 points.
Haven assets still continued to climb, with U.S. Treasuries and gold prices both rising Monday afternoon.
Here were the main moves in markets, as of 12:18 p.m. ET:
S&P 500 (^GSPC): +2.36% or +69.82 points to 3,024.04
Dow (^DJI): +2.53% or +643 points to 26,053.22
Nasdaq (^IXIC): +2.3% or +193.48 points to 8,760.53
Crude oil (CL=F): +4.94% or +$2.21 to $46.97 a barrel
Gold (GC=F): +2.02% or +$31.60 to $1,598.30 per ounce
10-year Treasury (^TNX): yielding 1.083%, down 4.3 basis points
11:09 a.m. ET: Global manufacturing sector contracts by the most in a decade amid coronavirus
The global manufacturing sector contracted by the most since 2009 amid supply chain, trade and demand disruptions due to the coronavirus, according to a joint report from IHS Markit and J.P.Morgan Monday.
The weighted average global purchasing managers’ index (PMI) registered at 47.2 for February, comprising a survey-record contraction in China and stagnant growth, on average, for the rest of the world. Readings below 50 indicate contraction.
In addition to China, Japan, Germany, France, Italy, Taiwan, South Korea and Australia registered contracting output in their manufacturing sectors. Meanwhile, the U.S., UK, Canada, Mexico, India and Brazil were some major countries to show output growth.
Here’s what Olya Borichevska from Global Economic Research at J.P.Morgan, said about the results of the report:
10:48 a.m. ET: Dow jumps 400+ points as rebound rally picks up
Each of the three major indices advanced more than 1% Monday, recovering from declines during the overnight session.
Gains in the Dow were led by more than 4% jumps in shares of Walmart, Merck & Co. and Apple. In the S&P 500, defensive stocks led gains, with the Consumer Staples and Utilities sectors outperforming.
Here were the main moves in markets, as of 10:52 a.m. ET:
S&P 500 (^GSPC): +1.14% or +33.62 points to 2,995.10
Dow (^DJI): +1.67% or +423 points to 25,832.46
Nasdaq (^IXIC): +1.26% or +108.66 points to 8,676.03
Crude oil (CL=F): +2.73% or +$1.22 to $45.98 a barrel
Gold (GC=F): +1.74% or +$27.20 to $1,593.90 per ounce
10-year Treasury (^TNX): yielding 1.083%, down 4.3 basis points
10:26 a.m. ET: Trump slams Federal Reserve for being ‘slow to act’ on rates
President Donald Trump renewed his attack on Federal Reserve and Fed Chair Jerome Powell in a Twitter post Monday morning, calling the central bank “slow to act” in their decisions to cut rates.
....competitive disadvantage. We should be leading, not following!
— Donald J. Trump (@realDonaldTrump) March 2, 2020
As of Monday morning, markets priced in a 100% probability that the Fed would cut rates at its March meeting, bringing the target band of benchmark interest rates down to 1.00-1.25% from the 1.50-1.75% band currently.
Late last week, Powell issued a statement saying that the Fed would “use [its] tools and act as appropriate to support the economy” in the midst of an escalating coronavirus outbreak.
The Fed has been on pause since its October meeting, on the heels of a cumulative 75 basis points worth of rate cuts in 2019.
10:10 a.m. ET: Stocks mixed, shaking off earlier gains
The three major indices were mixed just a half-hour after market open, losing steam after initially opening higher. The S&P 500 and Nasdaq were each off slightly, while the Dow held onto slim gains of about 34 points.
10:00 a.m. ET: ISM Purchasing Managers’ Index falls slightly more than expected in February, imports slump
The Institute for Supply Management’s February Manufacturing Purchasing Managers’ Index (PMI) declined slightly more than expected in February. As with IHS Markit’s reading , the print held above the neutral level of 50 to indicate expansion in the U.S. manufacturing sector.
The headline print came in at 50.1 for February, or below the 50.5 expected, according to Bloomberg-compiled data. In January, the PMI had been 50.9.
Beneath the headline, subindices capturing trends in new orders and prices each fell relative to January. The ISM employment subindex rose slightly to 46.9 from 46.6 in January, but was below expectations for a bounce up to 47.5.
While the exports subindex held above 50 in February, imports fell back into contractionary territory. This subindex tumbled 8.7 points to 42.6 in February, or the lowest level since May 2009.
“Respondents noted the combined effects of the Lunary New Year as well as the coronavirus,” said Timothy Fiore, chair of the Institute for Supply Management. “Lower imports will continue as the effects of the virus are better understood.”
9:45 a.m. ET: U.S. manufacturing sector holds in expansionary territory in February, according to IHS Markit
IHS Markit’s final February purchasing managers’ index showed the U.S. manufacturing sector expanded mildly for the month, even as the coronavirus outbreak escalated.
The final headline reading registered at 50.7, or just a tick below the preliminary reading of 50.8 earlier this month. Prints above the neutral level of 50 indicate expansion in a sector. In January, the headline PMI was 51.9.
But though the weakening in IHS Markit’s U.S. manufacturing PMI between January and February was relatively subdued compared to deteriorations in countries like China, the escalating coronavirus outbreak could hamper U.S. results in the upcoming months, IHS Markit warned.
“While trade war fears have eased, helping push firms’ expectations for future growth to the highest since last April, coronavirus-related supply chain issues threaten to constrain production in coming months,” Chris Williamson, chief business economist at IHS Markit, said in a statement.
“At the same time, companies have become increasingly concerned that the COVID-19 outbreak will also hit demand, which is reportedly already cooling amid uncertainly leading up to the presidential election,” he added. “Recent stock market volatility could also further dampen consumer spending and deter business investment.”
9:31 a.m. ET: Stocks open higher, bouncing after last week’s rout
Stocks opened in positive territory Monday morning after a volatile overnight session, pushing higher after last week’s steep losses.
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): +0.81% or +23.81 points to 2,978.03
Dow (^DJI): +0.95% or +305.24 points to 25,714.60
Nasdaq (^IXIC): +1.16% or +112.31 points to 8,677.65
Crude oil (CL=F): +2.75% or +$1.23 to $45.99 a barrel
Gold (GC=F): +1.69% or +$26.50 to $1,593.20 per ounce
9:25 a.m. ET: Stock futures turn around and jump heading into market open
Stock futures reversed course Monday morning and jumped into positive territory.
Contracts on the Dow rose about 200 points to 25,555.00, with minutes to go before the opening bell. Earlier in the overnight session, futures had indicated as low as 24,851.00.
8:36 a.m. ET: Jack Welch, former CEO and chairman of General Electric, has died at age 84
According to Yahoo Finance historical data, during Welch’s tenure, GE’s stock rose more than 4,000% from April 27, 1981, when it was trading as low as $1.31 a share to the $30s and $40s in September 2001.
7:41 a.m. ET: Stocks point to an eighth straight session of declines as coronavirus cases continue to rise
U.S. stocks paced toward another day of losses after a volatile session between Sunday evening and Monday morning.
Here were the main moves in the pre-market session, as of 7:41 a.m. ET:
S&P 500 futures (ES=F): 2,928.00, down 23 points or 0.78%
Dow futures (YM=F): 25,238.00, down 126 points or 0.5%
Nasdaq futures (NQ=F): 8,415.25, down 38.75 points or 0.46%
Crude oil (CL=F): $45.40 per barrel, up $0.64 or 1.43%
Gold (GC=F): $1,602.70 per ounce, up $36.00 or 2.30%
10-year Treasury (^TNX): yielding 1.065%, down 6.1 basis points