U.S. Stocks Giving Back Ground After Initial Jump
After moving sharply higher early in the session, stocks have given back ground over the course of the trading day on Friday. The major averages have pulled back well off their best levels of the day but remain in positive territory.
The major averages have moved back to the upside in recent trading but remain well off their highs. The Dow is up 258.09 points or 1.2 percent at 21,458.71, the Nasdaq is up 93.45 points or 1.3 percent at 7,295.25 and the S&P 500 is up 30.26 points or 1.2 percent at 2,510.90.
Bargain hunting contributed to the initial strength on Wall Street after the Dow suffered its biggest one-day percentage drop since the stock market crash of 1987 on Thursday.
Traders looked to pick up stocks at reduced levels following the recent sell-off, although they seemed somewhat cautious amid lingering concerns about the coronavirus.
Adding to the positive sentiment, a coronavirus test developed by Swiss drug giant Roche has been granted emergency use authorization by the FDA.
The FDA said this is the first commercially distributed diagnostic test to receive emergency authorization during the coronavirus outbreak.
Roche said it is committed to delivering as many tests as possible and is going to the limits of its production capacity.
The emergency authorization of the Roche test comes amid rising concerns about the relatively low levels of coronavirus testing in the U.S.
In a post on Twitter, President Donald Trump seemed to blame his predecessor former President Barack Obama for the issues with testing.
“Their response to H1N1 Swine Flu was a full scale disaster, with thousands dying, and nothing meaningful done to fix the testing problem, until now,” Trump tweeted.
“The changes have been made and testing will soon happen on a very large scale basis,” he added. “All Red Tape has been cut, ready to go!”
In U.S. economic news, a report released by the University of Michigan showed a relatively modest deterioration in consumer sentiment in the month of March in light of the rampant fear over the coronavirus outbreak and the subsequent sell-off on Wall Street.
The report showed the consumer sentiment index slid to 95.9 in March after rising to 101.0 in February, although the index still came in above economist estimates for a reading of 95.0.
“Importantly, the initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession,” said Surveys of Consumers chief economist Richard Curtin.
He added, “Nonetheless, the data suggest that additional declines in confidence are still likely to occur as the spread of the virus continues to accelerate.”
Banking stocks have pulled back off their best levels of the day but continue to see substantial strength in mid-day trading, with the KBW Bank Index spiking by 4.3 percent.
Considerable strength also remains visible among steel stocks, as reflected by the 3.7 percent jump by the NYSE Arca Steel Index.
Software, brokerage and transportation stocks also continue to see significant strength, helping to keep the major averages in positive territory.
On the other hand, gold stocks have moved sharply lower over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 7.3 percent to a nine-month intraday low.
The sell-off by gold stocks comes amid another steep drop by the price of the precious metal, with gold for April delivery plunging $62.40 to $1,527.90 an ounce.
Housing, biotechnology and oil stocks have also come under pressure, contributing to the pullback by the broader markets.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index tanked by 6 percent while China’s Shanghai Composite Index slumped by 1.2 percent.
Meanwhile, the major European markets have turned mixed over the course of the session. While the German DAX Index has fallen by 0.9 percent, the French CAC 40 Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.8 percent.
In the bond market, treasuries have climbed off their worst levels but continue to see modest weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.5 basis points at 0.864 percent.
Source: Read Full Article