Late Surge Lifts Wall Street Stocks As Virus Hits Economy

Wall Street stocks concluded a bruising week on a positive note Friday, rallying as President Donald Trump declared the coronavirus a national emergency and set the stage for more testing in the United States.

A late-afternoon surge enabled the Dow to finish almost 2,000 points higher, or 9.4 percent, at 23,185.62, nearly reversing the losses from Thursday, when the blue-chip index suffered its worst session since 1987.

The furious rally at the end showed volatility remains elevated in markets, a trend also apparent in Europe where major bourses gained but finished well below session highs as the World Health Organization targets Europe as the new epicenter of the pandemic.

WHO chief Tedros Adhanom Ghebreyesus said the continent now had "more reported cases and deaths than the rest of the world combined, apart from China".

He described it as a "tragic milestone", and warned that it was impossible to say when the virus would peak globally.

Shellshocked traders around the world are in panic mode, sending markets through the floor AFP / Johannes EISELE

The overall death toll jumped to more than 5,000 across the planet, including nearly 1,500 in Europe, with total infections topping 140,000 across the planet.

After initially being viewed as a China-centered problem, the virus has become a global pandemic, raising fears of a global recession as major economies grind to a halt and professional sports leagues and entertainment events are canceled.

"In mere weeks, the market has shifted gears from a transitory health scare to a full-blown global recession," said AxiCorp market strategist Stephen Innes.

"Global supply chains are no longer just 'disrupted' but are now in the process of shutting down completely," he added.

Global markets melted down especially hard on Thursday, with some bourses suffering their worst declines in history.

A deserted Via del Corso main shopping street in Rome, as Italy shut all stores except for pharmacies and food shops in a desperate bid to halt the spread of a coronavirus AFP / Alberto PIZZOLI

That set the stage for Friday's bounce, but the gains in Europe did not approach the losses of the prior day.

Milan was up 17 percent at one point, but ended the day with a seven percent gain.

London, Frankfurt and Paris, which all posted double digit losses on Thursday, were up over seven percent at one point.

London eventually closed up 2.5 percent, Paris up 1.8 percent and Frankfurt up 0.8 percent.

Markets have wiped trillions of dollars off the globe's combined company valuations in just a few weeks.

New York Governor Andrew Cuomo has banned public gatherings of more than 500 people, including shows in Manhattan's iconic Broadway theater district AFP / Angela Weiss

Back in the US, markets cheered Trump's late-afternoon announcement where the president, accompanied by health care and retail executives, announced plans to radically increase testing for the virus as the country tries to control a public health crisis that largely shut down the economy in China and Italy.

Further testing is expected to lead to a surge in US cases as well, a dynamic that could challenge markets again next week.

Art Hogan, chief market strategist at National Securities, said Trump's announcement met expectations as far as laying out a health care response to the crisis.

"It's the first time we've heard any details that have been elucidated as far as concrete steps," Hogan said.

Disney is closing its giant theme parks in Florida, California and Paris over the coronavirus AFP / BERTRAND GUAY

The measures come on the heels of emergency steps by the Federal Reserve to boost market liquidity and cut interest rates.

Markets are also anticipating a US fiscal response to the crisis, and after trading ended Democratic House leader Nancy Pelosi said she'd reached an agreement with the Trump administration on a stimulus bill.

New York - Dow: UP 9.4 percent at 23,185.62 (close)

New York - S&P 500: UP 9.3 percent at 2,711.02 (close)

New York - Nasdaq: UP 9.4 percent at 7,874.88 (close)

London - FTSE 100: UP 2.5 percent at 5,366.11 (close)

Frankfurt - DAX 30: UP 0.8 percent at 9,232.08 (close)

Paris - CAC 40: UP 1.8 percent at 4,118.36 (close)

Milan - FTSE MIB: UP 7.1 percent at 15,954.29 (close)

EURO STOXX 50: UP 1.6 percent at 2,586.02 (close)

Tokyo - Nikkei 225: DOWN 6.1 percent at 17,431.05 (close)

Hong Kong - Hang Seng: DOWN 1.1 percent at 24,032.91 (close)

Shanghai - Composite: DOWN 1.2 percent at 2,887.43 (close)

Dollar/yen: UP at 108.02 yen from 104.64 yen at 2100 GMT