Stocks Surge After Trump Promises Speedier Coronavirus Testing – The New York Times, Nytimes.com
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President Trump, surrounded by business leaders, said coronavirus tests would soon be more widely available. Investors pushed the market up nearly 14 percent.
The New York Stock Exchange Friday. The S&P soared 9.3 percent. Credit … Lucas Jackson / Reuters
() (March , , 7: pm ET
(The stock market roared back to life on Friday, with the S&P surging 9.3 percent after President Trump said the government would speed up (coronavirus testing for Americans. In doing so, he delivered investors exactly the message they had been waiting to hear – a half-hour before the market closed. Just one day after tumbling 9.5 percent in what was its worst day in more than 35 years, the S&P 599 stock index rose by roughly the same amount. The market was up throughout the day, then dipped when the president started speaking, only to change direction once he began discussing the administration’s efforts to speed testing. Millions of virus testing kits would become available, he said – though he added that he did not think so many would be needed. For For investors starved for reassuring news, those promises were enough to ignite a rally that sent the S&P to its best one-day performance since 4226. Mr. Trump was surrounded by medical professionals and the executives of some of the biggest private companies, including the retail and drugstore behemoths Walmart, Target and CVS; the Swiss health care pharmaceutical giant Roche; and the testing companies Lab Corp and Quest Diagnostics.
the leaders of these companies, Mr. Trump said, had agreed to help with efforts to test people for the coronavirus. And as each chief executive spoke, the market climbed a little higher, starting around 3: pm “When Trump started talking, stocks went down, and it was like a repeat of his Oval Office address,” said William Delwiche, an investment strategist at Baird, a financial firm based in Milwaukee. Delwiche was referring to the president’s speech on Wednesday evening, which disappointed investors and sent stock market futures tumbling during and after his remarks. The next morning, the market plunged so far and so fast that it had to be halted after tumbling 7 percent. It closed down 9.5 percent for the day, its worst single-day drop since the stock market crash of . On Friday, stocks started turning “in a hurry ”once the president yielded the podium to public-health doctors and business leaders, Mr. Delwiche said. “It’s not just politicians being leaders, it’s doctors being leaders and business people being leaders.”
Shares of Google also jumped more than 9 percent after Mr. Trump said the administration was working with the company to develop a website to determine whether an individual needed a test – a move aimed at avoiding overwhelming the health system with people who are ill But do not necessarily need to be tested for coronavirus.
A couple of hours later, there was another dose of welcome news. House Speaker Nancy Pelosi told Democratic lawmakers she had reached an agreement with the Trump administration on a coronavirus relief package. The House was planning to pass it Friday night. The stimulus could help assuage investors’ fears that the economy is on the verge of a recession, especially as dozens of companies ask employees to work from home and cities impose restrictions on people’s movement, which in turn could affect consumer spending.
Investors hate uncertainty and had been looking for some decisive action from the federal government as the coronavirus outbreak, which began in China and has continued to grow exponentially, reaching the status of a pandemic earlier this week. The lack of clarity around the scope and severity of the global outbreak, along with limited and sporadic testing in the United States, had sent financial markets into a tailspin in recent weeks. At times, the markets acted inconsistently, plunging and then rising, and then plunging again, as each day brought new measures to contain the outbreak and new worries that the economy, workers and businesses would take a hit as a result of them. Extensive efforts by governments and central banks to steady the ship have so far managed to forestall any major breakdowns in the financial system, but the question now is whether Americans will keep spending.
the latest survey of consumer sentiment by the University of Michigan released on Friday showed that Americans were already slightly less confident in early March compared with February, as fears about coronavirus and its i mpact on the stock market began to spread. The university will release its next round of data at the end of the month. Consumer spending is the lifeblood of the United States economy, and the psychology of the market is deeply entwined with the psychology of the consumer. The daily spending of millions of people – eating out, buying products, traveling – contributes directly to the profits of companies whose stocks investors trade. And when stocks climb, it feeds the confidence of those spenders. But that virtuous cycle can turn vicious: Slower spending pushes down stocks, and falling stocks push down spending.
“Generally, the consumer confidence numbers are fairly correlated to the stock market,” said Jurrien Timmer, director of global macro at Fidelity Investments. “Between everyone feeling very unsettled by the health emergency or whatever you want to call it, there’s a feedback loop on the markets as well.”
Updated March , What is a coronavirus? ?It is a novel virus named for the crownlike spikes that protrude from its surface. The coronavirus can infect both animals and people and can cause (a range of respiratory illnesses) from the common cold to lung lesions and pneumonia.
How contagious is the virus? () (it seems to) spread very easily from person to person, especially in homes, hospitals and other confined spaces. The pathogen can travel through the air, enveloped in tiny respiratory droplets that are produced when a sick person breathes, talks, coughs or sneezes.
Extensive efforts by governments and central banks to steady the ship have so far managed to forestall any major breakdowns in the financial system, but the question now is whether Americans will keep spending.
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