Monday's Stock Market Open: US Equities Rise As Traders Assess Economic Impact Of Coronavirus, Oil Plunges

Update: 12:05 p.m. EDT:

U.S. stocks were broadly higher at noon on Monday.

The Dow Jones Industrial Average gained 411.34 points to 22,048.12, while the S&P 500 rose 54.73 points to 2,596.20 and the Nasdaq Composite Index advanced 193.23 points to 7,695.61.

Pending home sales rose a better-than-expected 2.4% in February from January, while sales were up 9.4% annually. However, this time frame preceded the arrival of coronavirus in the U.S.

In Europe markets finished higher, as Britain’s FTSE-100 rose 0.97%, France’s CAC-40 gained 0.62% and Germany’s DAX jumped 1.9%.

But WTI crude futures plunged 5.58% to $20.32 per barrel.

Original story:

U.S. stocks rose on Monday as investors mulled over economic damage wrought by the coronavirus epidemic and government efforts to alleviate it.

The Dow Jones Industrial Average gained 173.89 points to 21,810.67, while the S&P 500 rose 29.21 points to 2,570.68 and the Nasdaq Composite Index advanced 95.42 points to 7,597.80.

On Friday, President Donald Trump signed a $2 trillion stimulus package that will provide direct payments to Americans to mitigate the economic damage from the coronavirus outbreak.

Trump also said “social distancing” protocols will remain in place through at least Apr. 30, while his top infectious-disease expert, Dr Anthony Fauci warned up to 200,000 Americans could be killed by the virus.

Johns Hopkins University data showed that more than 723,000 coronavirus cases have been confirmed around the world, with the U.S. reporting over 136,000. The death toll in Italy passed the 10,000 mark over the weekend.

Johnson & Johnson (JNJ) said on Monday said it has a lead vaccine candidate for coronavirus and that it expects to start phase 1 human clinical studies by September 2020.

Abbott Laboratories (ABT) said it introduced a coronavirus test that can determine if someone is infected with the virus in only five minutes.

Last week, the Dow jumped more than 12%, but some analysts were skeptical about the rally.

“We have argued that given the speed of the fall there will have to be relief rallies, but that they are likely to end up being faded,” wrote Mislav Matejka, a JPMorgan equity strategist. “Ultimately, this bounce might prove tactical, too.”

“Bulls staged an epic comeback,” said Ken Berman, strategist at Gorilla Trades. “Despite the rally … the uncertainty regarding the length of the necessary, but economically damaging global lockdowns continues to weigh on risk assets. The technical picture continues to be bearish across the board, despite the mid-week surge in stocks, with all of the key trend indicators still pointing lower.”

“Equity markets are overextended, but face a bumpy period of even grimmer virus news and poor economic statistics in the next 1-2 months,” wrote strategists at MRB Partners. “The world is now entering a third phase, the first being the shock of an out-of-control virus spreading around the globe, then the massive policy response, and now the economic fallout phase has arrived and will test investors’ very fragile confidence.”

Overnight in Asia, markets closed lower. China’s Shanghai Composite tumbled 0.9%, while Hong Kong’s Hang Seng slipped 1.32%, and Japan’s Nikkei-225 dropped 1.57%.

In Europe markets were mixed, as Britain’s FTSE-100 slipped 0.33%, France’s CAC-40 fell 0.88% and Germany’s DAX edged up 0.21%.

Crude oil futures dropped 6.37% at $20.14 per barrel, Brent crude plunged 6.05% at $26.26. Gold futures fell 0.66%.

The euro slipped 0.96% at $1.1032 while the pound sterling fell 0.33% at $1.2406.