Stocks surge on new virus measures; Dow up 1,985 points

Wall Street roared back from its worst day in 30 years Friday with a broad rally that sent the Dow Jones Industrial Average nearly 2,000 points higher its biggest point gain ever after President Donald Trump declared the coronavirus pandemic a national emergency.

The Dow's gains doubled in the last half-hour of trading as Trump made his remarks, giving the index its largest percentage gain since 2008 and capping a rally that recouped many of the losses from a day earlier.

That's when the index saw its worst slide since the Black Monday crash of 1987 and European indexes had one of the worst drops on record. The major indexes each closed with gains of more than 9 per cent.

The turnaround wrapped up a week of brutal losses on Wall Street amid heightened fears that the virus outbreak will lead to a global recession. Investors have been clamoring for strong action from the US government to combat the economic impact of the outbreak on businesses and workers. All told, the Dow jumped 1,985 points, or 9.4 per cent.

News that the White House and Congress were close to announcing an agreement on a package to provide sick pay, free testing and other resources helped boost the market.

"We're finally getting that a little late to the party, but it's better to be late to the party then not to come to the party," said Ryan Detrick, senior market strategist at LPL Financial. He said the stimulus plan should help cushion the financial effects on people and businesses.

Stocks surged in the early going Friday after Treasury Secretary Steven Mnuchin said on CNBC that the two sides were "very close to getting this done.

But during a late-afternoon White House press conference, Trump said the White House and Congress had yet to agree on a broader aid package. He said he doesn't believe House Democrats are "giving enough."
Investors' anticipation of a government stimulus effort and a rate cut by the Fed next week likely put traders in a buying mood, though it's not unusual for stocks to rebound a day after a big decline, something Wall Street calls a "dead cat bounce."