NEW YORK (AP) — Stocks are closing solidly higher after President Donald Trump promised he’s “going big” with plans to blunt the economic pain caused by the coronavirus outbreak.
Director of the National Economic Council Larry Kudlow talks on Monday at Washington, D.C. about offering money to help airlines that have been hit hard by the coronavirus outbreak. (Source: CNN)
The market got back not quite half of what it lost in a breathtaking drop a day earlier, which was the biggest in more than three decades.
The S&P 500 rose 6% and the Dow rose 5.2%, or 1,049 points.
Treasury Secretary Steven Mnuchin said the government intends to send to checks to Americans in the next two weeks.
Tuesday’s gains still pale in comparison to the 12% plunge for the U.S. stock market Monday.
The Federal Reserve says it will buy short-term loans from banks and companies to support the flow of credit as the economy grinds to a halt amid the viral outbreak.
The Fed is reviving a program that it first used during the 2008 financial crisis to unclog a short-term lending market for what is known as “commercial paper.”
Large businesses issue commercial paper to raise cash to meet payrolls and cover other short-term costs.
France is pledging $50 billion in aid for small businesses hurt by the spreading virus.
Volkswagen will close most of its plants for two weeks.
U.S. employers sharply increased the number of jobs they advertised in January, a sign the job market and economy were in mostly solid shape before the virus outbreak hit.
Businesses, nonprofits and government agencies posted nearly 7 million open jobs in January, up 6.3% from the previous month.
Hiring slowed, while the number of people quitting their jobs was largely unchanged.
Quits can be a sign of economic strength since most people quit a job when they have another lined up.
Most companies have likely frozen hiring and some have cut workers amid nationwide shutdowns to prevent the spread of the coronavirus.
Retail sales fell 0.5% in February, indicating the consumer sector was slowing even before the coronavirus struck with force in the United States.
The Commerce Department reported Tuesday that the February drop in sales followed a solid 0.6% gain in January.
Trading on the Mexican Stock Exchange was halted for 15 minutes after the key index fell by 7.12%, triggering an automatic halt.
The fall contrasted with sharp gains in U.S. markets happening at the same time.
Alfredo Coutiño of Moody’s Analytics said Mexico’s markets “are now realizing that the country is facing a higher risk of contamination by the coronavirus,” and the weakness of the Mexican economy.
Despite reassurances from officials, Mexico and its health system are showing “real vulnerability,” Coutiño continued. He said the domestic stock market particularly doesn't like the lack of government measures to protect the economy and the people.
"Fiscal and monetary policies are running far behind the curve,” he said.
The global pandemic has hammered world markets. The Mexican peso on Monday weakened to over 23 to the dollar for the first time in history and continued its slide Tuesday.
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