Stocks - Dow Jumps 690 Points Despite U.S. Extending Containment Measures
Investing.com
Published Mar 30, 2020 04:10PM ET
By Yasin Ebrahim
Investing.com – The Dow made a bright start to the week on Monday, with investors weighing the impact of President Trump's move to extend measures to combat the Covid-19 pandemic.
The Dow 3.19%, or 690 points. The S&P 500 added 3.29% and the Nasdaq Composite rose 3.62%.
Over the weekend, President Trump said the U.S. containment measures, which include social distancing, would be extended to April 30 from mid-April.
The move comes just days after Trump previously touted Easter as a "beautiful timeline," to reopen the U.S. While the move is widely expected to help stem the spread of the coronavirus, some appear worried about the prospect of a deeper recession.
"Amid the prospects of keeping workers home and businesses closed for another 30 days, the market is beginning to price in a more severe recession despite unprecedented stimulus," Stifel said in a note.
Infections in the U.S. jumped 72% to about 148,000 since Friday, according to Johns Hopkins Case Tracker.
While cases worldwide continue to mount, Italy, the epicenter of the outbreak in Europe, offered a glimmer of hope. Italy reported 4,050 infections, compared with 5,217 on Sunday, the lowest daily number of infections in two weeks.
Just days after Trump signed the $2 trillion stimulus deal, the largest aid package in U.S. history, to ensure the economy bounces back quickly from a widely expected recession, investors are seemingly betting on further stimulus from Congress.
House Majority Leader Nancy Pelosi said the fourth coronavirus bill would be about recovery, with aid aimed at supporting infrastructure and opportunities for family and medical leave.
Healthcare and tech stocks spearheaded the broader market rally, with chip and FANG stocks among the biggest gainers.
Micron Technology (NASDAQ:MU), Qualcomm (NASDAQ:QCOM), NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices Inc (NASDAQ:AMD) were all sharply higher.
The uptick in chip stocks comes against growing fears about a recession in the industry. Citigroup (NYSE:C) forecasts the industry will follow the same pattern as that of the 2008-to-2009 recession; The worst decline will be in the second quarter followed by a recovery in the fourth quarter and the first quarter of next year.
Energy, meanwhile, also participated in the broader rally, even as oil prices plunged to 18-year lows, with no end in sight to the ongoing Saudi Arabia and Russia oil price war at a time when oil demand has been hurt by the coronavirus outbreak.
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