Mar 24, 2020 9:00 PM

Dow has best day since 1933 as Congress nears deal on aid

Posted Mar 24, 2020 9:00 PM
Image courtesy New York Stock Exchange
Image courtesy New York Stock Exchange

NEW YORK (AP) — The Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal on Tuesday to inject nearly $2 trillion of aid into an economy ravaged by the coronavirus.

The Dow burst 11.4% higher, while the more closely followed S&P 500 index leapt 9.4% as a wave of buying around the world interrupted what has been a brutal month of nearly nonstop selling. Despite the gains, investors were far from saying markets have hit bottom. Rallies nearly as big as this have punctuated the last few weeks, and none lasted more than a day.

Both Democrats and Republicans said Tuesday they’re close to agreeing on a massive economic rescue package, which will include payments to U.S. households and aid for small businesses and the travel industry, among other things. A vote in the Senate could come later Tuesday or Wednesday.

Investors have been waiting in frustration for such aid, particularly as the Federal Reserve has done nearly all it can to sustain markets, including its latest round of extraordinary aid launched Monday.

“I don’t think there’s any more confidence in the fundamental outlook, but the fact that we’re making progress is good news,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “It’s sort of like, keep the patient alive in the emergency room so you can provide some treatment options.”

The Dow rose 2,112.98 points, its biggest point gain in history, to 20,704.91. The S&P 500, which is much more important to most 401(k) accounts, rose 209.93, or 9.4%, to 2,447.33 for its third-biggest percentage gain since World War II. The Nasdaq composite jumped 557.18 points, or 8.1%, to 7,417.86.

The buying circled the world. South Korean stocks surged 8.6%, Germany’s market jumped 11% and Treasury yields rose in a sign that investors are feeling less fearful.

The market has seen rebounds like this before, only for them to wash out immediately. Since stocks began selling off on Feb. 20, the S&P 500 has had six days where it’s risen, and all but one of them were big gains of more than 4%. After them, stocks fell an average of 5% the next day.

“One of the things to be careful about is thinking this will be the panacea or that this fiscal response will be sufficient,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.

Ultimately, investors say they need to see the number of new infections peak before markets can find a floor. The increasing spread is forcing companies to park airplanes, shut hotels and close restaurants to dine-in customers.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. Those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems. Recovery could take six weeks in such cases.

Economists are topping each other’s dire forecasts for how much the economy will shrink this spring due to the closures of businesses, and a growing number say a recession seems inevitable.

Some of the market’s areas hardest hit by the closures, though, led the way higher Tuesday as expectations rose for incoming aid from the U.S. government.

Norwegian Cruise Lines, MGM Resorts and American Airlines Group were all up at least 33%. Energy companies and banks were also strong, though all remain well below where they were a month ago.

Governments and central banks in other countries around the world are unveiling unprecedented levels of support for their economies in an attempt to limit the scale of the upcoming virus-related slump. Germany, a bastion of budgetary discipline, also approved a big fiscal boost.

The gains came even as the first reports arrived showing how badly the outbreak is hitting the global economy. In the United States, a preliminary reading on business activity in March showed the steepest contraction on record, going back to 2009. Reports were also gloomy for Europe.

“Everyone was prepared for a set of shockers, and that is precisely what we got, but they are not a surprise,” said Chris Beauchamp, chief market analyst at IG. “It is at times like this that the market’s propensity to look forward is demonstrated most effectively.”

More dour data is nearly assuredly on the way. On Thursday, economists expect a report to show the number of Americans applying for jobless claims easily set a record last week. Some say the number could be way beyond 1 million, amid a wave of layoffs, topping the prior record of 695,000 set in 1982.

Helping to lift sentiment in markets is news from China that it is preparing to lift the lockdown in Wuhan, the epicenter of the outbreak, and from Italy reporting a reduction in the number of new cases and coronavirus-related deaths.

“It’s still early days, of course — perhaps investors can start to envisage life beyond the coronavirus,” said Craig Erlam, senior market analyst at OANDA Europe. “That could make stocks look a little more attractive, although anyone jumping back in now will need to have nerves of steel.”

Despite Tuesday’s big gains, it’s no time to get complacent, said Adam Taback, chief investment officer for Wells Fargo Private Bank.

“We would caution that the danger is not all behind us at this point,” he said. “We still have not seen numbers that give us an indication of just how bad things are. Today was a good day, but we would not necessarily see this as turnaround time.”

___

Continue Reading Great Bend Post
Mar 24, 2020 9:00 PM
UPDATE: What Kansans need to know about the COVID-19 coronavirus
Health officials say one way to stop the spread of the new coronavirus is to wash your hands for at least 20 seconds. Celia Llopis-Jepsen / Kansas News Service

Kansas News Service

Note: A Spanish-language version of this article can be found HERE.

The new coronavirus is spreading quickly around the world, including across Kansas, and setting off a range of responses.

The Kansas News Service is boiling down key developments in the state and updating the status regularly here. To read this information in Spanish, go here. This list was last updated at 4:10 p.m. April 7.

CASES AND DEATHS

900 cases (see map for counties) and 223 hospitalizations

27 deaths  (the state is no longer disclosing which counties are seeing deaths)

NOTE: These figures only include cases confirmed with lab tests and do not represent the real, unknown total. Community transmission is occurring in parts of Kansas. View additional charts showing the disease’s spread over time and other trends here.

Gov. Laura Kelly is instituting a statewide stay-at-home order as of 12:01 a.m. March 30. It will last until at least April 19. Stay-at-home orders allow people to take care of essential activities (such as grocery shopping or going to work) as well as exercise outside, but otherwise keep to themselves. 

The state’s stay-at-home order supersedes at least 13 county-by-county orders. Should the state’s order lift before a county’s is through, the county can choose to keep its own in effect.

SHOULD I SELF-QUARANTINE?

The Kansas Department of Health and Environment (KDHE) is now mandating home quarantine for 14 days if you've traveled to the places listed below. If you come down with symptoms (such as a fever of 100.4 degrees or higher, coughing or shortness of breath) during those 14 days, contact your health care provider and explain your potential COVID-19 exposure.  

  1. Connecticut on or after April 6.
  2. Louisiana or anywhere in Colorado on or after March 27.
  3. States with known widespread community transmission (California, Florida, New York and Washington) on or after March 15.
  4. Illinois or New Jersey on or after March 23.
  5. Eagle, Summit, Pitkin and Gunnison counties in Colorado (if your visit was March 8th or later).
  6. Cruise ships or river cruises on or after March 15. Anyone previously told to quarantine because of their cruise ship travel should also finish out their quarantine.
  7. International destinations on or after March 15. Anyone previously told to quarantine because of their international travel should also finish out their quarantine.

Some doctors recommend patients with COVID-19 symptoms stay home even if they test negative for the disease, because of concerns that current testing approaches may be producing a significant number of false negatives.

TESTING AVAILABILITY

Several hospitals across the state now offer drive-through testing, but patients must get doctor approval in advance or else will be turned away. Many Kansans can’t be tested unless they’re sick enough to be hospitalized, and results may take up to a week. 

That’s because testing supplies remain limited and private labs helping many clinics and hospitals have large backlogs of samples. Hospitals trying to buy equipment for in-house testing say vendors are backlogged, too. The state will soon have several portable machines that can conduct 5- to 15-minute tests, and plans to lend them out to facilities most in need.

Some Kansas hospitals have succeeded in getting the testing materials and can give patients their results within a day. The state health department lab in Topeka can handle several hundred samples per day — a fraction of the demand.

Under a new federal law, you should not have to pay for your coronavirus test, regardless of insurance status (but patients could still see related bills). Separately, Blue Cross Blue Shield of Kansas, the state’s largest private insurer, says some patients won’t have to pay for coronavirus treatment.

HOW ARE UNIVERSITIES RESPONDING?

Public and private universities and community colleges in the state will finish this semester via online classes. Spring sports have been canceled. Most staff travel has been suspended. Graduations at KU, K-State and Wichita State are postponed or rescheduled.

The University of Kansas and Wichita State also plan to hold summer classes online. KU and K-State announced hiring freezes in early April. 

HOW ABOUT K-12 SCHOOLS?

In mid-March, Kansas became the first state in the U.S. to shut down school buildings for the rest of the 2019-20 school year. A state task force then issued guidance for distance learning, for which students aren’t expected to spend more than a few hours a day. 

Some districts that make high schoolers earn more credits than required by the state will graduate them this year based on the state’s lower bar. 

Districts across the state are still providing free meals to eligible children, but some have stopped because of concerns about the coronavirus spreading at meal pickup sites.

WHAT IN DAY-TO-DAY LIFE IS AFFECTED? 

  1. Church gatherings and funerals: Effective April 8, the governor has prohibited services of more than 10 people. That doesn’t count people performing the rituals or funeral workers, but they must stay six feet apart from each other.
  2. State tax deadline: Extended until July 15, in line with a delay for filing federal tax forms.
  3. Evictions: Business and residential evictions are banned until May 1 if a tenant is unable to pay because of the coronavirus.
  4. Mortgage foreclosures: Foreclosures are banned until May 1.
  5. Small businesses: May be eligible for emergency federal loans. Find information here.
  6. Hospitality businesses: Kansas created an emergency loan program, which quickly ran out of funds, but businesses can still apply to help the state assess the need for more assistance.
  7. Utilities: Evergy, which serves 950,000 customers in Kansas, will not disconnect residential or business services for an unspecified amount of time. 
  8. Gatherings: Restricted to fewer than 10 people throughout the state.
  9. State of emergency: Kansas’ declaration is good through May (and can be extended). It gives the government more power to marshal resources and Kelly the ability to make certain decisions when lawmakers aren’t in session.
  10. State workers: Access to the Statehouse is limited to official business only through April 19. Most state workers are doing their jobs remotely.
  11. Prisons and jails: The Kansas Department of Corrections ended visitation at all state facilities, and will “re-evaluate on an ongoing basis.” It urges families to talk to inmates through email, phone calls and video visits. County jails largely have ended visitations as well. 

HOW BAD IS THE VIRUS? 

COVID-19 usually causes mild to moderate symptoms, like a fever or cough. Most people with mild symptoms recover in two weeks. More severe cases, found in older adults and people with health issues, can have up to six weeks’ recovery time or can lead to death.

HOW CAN YOU AVOID IT?

  1. Wash your hands for at least 20 seconds. Frequently.
  2. Cover your coughs.
  3. The CDC now recommends wearing a cloth mask in situations where social distancing isn’t possible; instructions for sewn and non-sewn versions are here.
  4. If you’re an older Kansan or medically fragile, limit your trips to the grocery store or any public space.
  5. Stay home if you are sick — this goes for all ages.

FOR MORE INFORMATION ON COVID-19

Kansas Department of Health and Environment: http://www.kdheks.gov/coronavirus/

The Centers for Disease Control and Prevention: https://www.cdc.gov/coronavirus/2019-nCoV/index.html

The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.