US Market rebounds as Trump and Business Leaders Pledge Support

The US equity market rebounded on Friday, 13 March 2020, as investors chased for bottom fishing after President Trump declared a national emergency as the number of coronavirus cases in the U.S. rises and announced to free up as much as $50 billion in financial resources to assist Americans affected by the outbreak. At closing bell, the Dow Jones Industrial Average soared 1,985 points, or 9.4%, to 26,79.16, while the S&P 500 index 230.38 points, or 9.3%, to 2,711.02. The Nasdaq Composite Index gained 673.07 points, or 9.4%, to 7,874.88. For the week, the Dow was down 10.4%, the S&P 500 index booked an 8.8% decline, while the Nasdaq saw an 8.2% weekly plunge.

The S&P 500 rose more than 9 percent, making Friday its best day since 2008, with most of the gains coming late in the day as government officials and business executives spoke at a news conference at the White House.

President Trump declared a national emergency Friday afternoon, opening up a $50 billion spigot of funding to combat the coronavirus pandemic, while ramping up testing and expanding the ability of hospitals and doctors to provide treatments for the disease.

U.S. Treasury Secretary Steven Mnuchin on Friday also said the government would use all its tools to support financing market functioning, while the Federal Reserve said it would ramp up its monthly purchases of Treasury securities, an effort aimed at getting banks to extend credit to businesses and beyond.

The Fed said it would inject $1.5 trillion into the short-term lending markets that banks use to lend to each other on Thursday and Friday. The central bank also announced it will buy $60 billion worth of Treasury bonds for the next month (March 13 through April 13) to help keep that market functioning appropriately.

Airline stocks rose, with Delta Air Lines gaining 4.7% after the carrier said it would cut capacity by 40% and cancel flights to Europe. United Airlines shares rose 4.6%. American Airlines gained 6.4%.

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