Monday's Stock Market Open: US Equities Rise As Central Banks Pledge To Act Against Virus, Oil Rebounds

Update: 12:05 p.m. EDT:

Stocks surged as of noon Monday in volatile trading as the market sought to rebound from last week’s devastating losses.

The Dow Jones Industrial Average gained 755.53 points to 26,164.89 while the S&P 500 rose 83.11 points to 3,037.33 and the Nasdaq Composite Index advanced 243.37 points to 8,610.74.

In Europe markets finished mixed as Britain’s FTSE-100 gained 1.13%, France’s CAC-40 gained 0.44% and Germany’s DAX dropped 0.27%.

West Texas Intermediate crude oil futures jumped 5% to more than $47 per barrel.

The Institute for Supply Management’s manufacturing Purchasing Manager’s Index fell to 50.1 in February from 50.9 in January.

The Commerce Department said Monday that construction spending rose by 1.8% in January to a record annual rate of $1.37 trillion.

Original story:

U.S. stocks opened higher on Monday after central banks in Europe and Japan vowed to take steps to prevent negative impact of coronavirus on their economies.

The Dow Jones Industrial Average gained 296.59 points to 25,705.95 while the S&P 500 rose 31.66 points to 2,985.88 and the Nasdaq Composite Index advanced 114.37 points to 8,681.74.

The Dow, S&P 500, and Nasdaq Composite all dropped more than 10% last week, their worst weekly performance since October 2008.

More than 88,000 global cases of coronavirus were confirmed as of Monday in more than 60 countries, with more than 3,000 virus-related deaths. The U.S., Australia and Thailand reported their first virus-related deaths over the weekend, while South Korea reported almost 500 new cases and Italy now has almost 1,700 cases.

Major central banks, the European Central Bank, the Bank of England and Bank of Japan, all pledged to take steps to minimize the economic impact of the virus.

“The Governing Council stands ready to adjust all its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner,” ECB Vice President Luis de Guindos said Monday.

Bank of Japan said: "The BoJ will monitor developments carefully, and strive to stabilize markets and offer sufficient liquidity via market operations and asset purchases."

Manufacturing data from China uncovered the damage done by virus-related shutdowns.

The Caixin/Markit Manufacturing Purchasing Managers’ Index registered 40.3 for February, well below expectations. China’s official manufacturing PMI plunged to a record low of 35.7 in February, from 50 in January.

The Organization for Economic Cooperation and Development warned that global gross domestic growth could plunge to 1.5%, down from its prior 2.9% growth projection.

U.S. President Donald Trump will meet with pharmaceutical industry executives at 3 p.m. on Monday.

“The outbreak of [coronavirus] has certainly changed the near-term narrative,” said Chetan Ahya, global head of economics at Morgan Stanley. “It is an untimely shock, considering that the starting point of global growth was weak, and the recovery was very nascent.”

“Global investors will be prone to panic as the virus arrives at their doorstep, underscoring the need for near-run prudence and patience before augmenting favored holdings,” strategists at MRB Partners wrote. “The outlook is uncertain, or rather certainly bearish in the near term as quarantining spreads around the world, but with considerable doubt as to the duration and depth of the economic fallout.”

Overnight in Asia, markets rebounded. China’s Shanghai Composite jumped 3.15%, while Hong Kong’s Hang Seng rose 0.62%, and Japan’s Nikkei-225 gained 0.95%.

In Europe markets traded mixed as Britain’s FTSE-100 gained 0.73%, France’s CAC-40 slipped 0.08% and Germany’s DAX dropped 0.3%.

Crude oil futures jumped 3.26% at $46.22 per barrel and Brent crude gained 2.74% at $51.03. Gold futures rose 1.74%.

The euro rose 0.94% at $1.1131 while the pound sterling slipped 0.34% at $1.2773.