U.S. stock futures and European indexes recovered some ground a day after Wall Street’s worst day in more than three decades.
Futures tied to the Dow Jones Industrial Average rose 4.3%, suggesting that blue-chip stocks may open higher in New York. U.S. stocks plunged Thursday, with the Dow falling 10% as the rapidly spreading coronavirus drove fears of a global slowdown despite action from the Federal Reserve.
Lawmakers and the Trump administration are nearing a final agreement on legislation aimed at aiding Americans affected by the spread of the coronavirus, House Speaker Nancy Pelosi said. She expects lawmakers to take up more bills related to the economic and health impact of the pandemic in the future.
The pan-continental Stoxx Europe 600 jumped 4.2% as U.K. and Italian stocks rallied after Thursday’s steep declines. Italy’s financial regulator suspended short selling of 85 companies until the end of the trading day. The U.K. also banned trading activity on the same companies dual-listed on British exchanges.
Oil prices rose, with Brent crude climbing 5.5% to trade at $35.04 a barrel.
The yield on the benchmark 10-year U.S. Treasury edged up to 0.877%, from 0.842% Thursday. The Japanese yen declined 1.7% against the dollar.
In Asia, most major indexes closed down after a volatile day that prompted some exchanges to impose short trading halts. Japan’s Nikkei declined 6.1%. Australia’s ASX 200 index closed up 4.4% after its central bank provided A$8.8 billion to its banks in short-term borrowing known as the repo market. India’s Sensex index rose 4% after the Reserve Bank of India also said that it would inject cash into markets.
These policy moves followed packages announced by the Federal Reserve and the European Central Bank to try to support the economies from the coronavirus fallout and a recent crash in oil prices. The Fed said it would provide $1.5 trillion to banks in the repo market.
The ECB announced a series of measures Thursday that included a temporary expansion to its bond-buying program and loans for banks at interest rates as low as minus 0.75%.
The yield on Italy’s 10-year government bonds continued to rise Friday, reaching 1.897%, from 1.766% Thursday.
ECB President Christine Lagarde on Thursday indicated that the central bank wouldn’t step in to support Southern European governments if they came under pressure from investors. Italy has so far been Europe’s epicenter for the coronavirus with over 15,000 cases. Investors are also selling down Greek debt, sending its yield rising to 2.282%, from 2.082% on Thursday.
Trader Georgi Bozhidarov