, Wall Street stages recovery after heavy losses on Thursday, Saubio Making Wealth

Wall Street stages recovery after heavy losses on Thursday

Business LIFESTYLE
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US shares ender higher on Friday as buyers stepped in following sharp losses earlier in the day.

At the closing bell, the Dow Jones was 1.9% up, while the S&P 500 rose 1.3% and the Nasdaq gained 1%, buoyed by a positive US consumer confidence survey.

But, after big falls on Thursday, the three indexes still saw their biggest weekly percentage fall since mid March.

In Europe on Friday, London’s FTSE 100 rose 1.74%, while France’s Cac 40 was up almost 2% and Germany’s Dax 1.25%.

Thursday’s torrid trading left the Dow down 7% and Europe 5% lower.





Thursday’s sell-off was prompted by a bleak view of the US economy from its central bank, the Federal Reserve, and reports of rising coronavirus cases from some US states.

On Friday, data from the University of Michigan showed a surprisingly big jump in confidence among consumers.

Markets remain volatile as investors struggle to assess the economic damage of coronavirus.

Ryan Giannotto, director of research at GraniteShares ETFs in New York, said there was no strong reason for the pick up in values: “People are just taking a breather after the outright selling yesterday,.

“There’s always going to be more headlines about coronavirus cases increasing, more tests increasing. That’s just something that markets, investors and companies are going to have to learn to deal with.”

In the UK, David Madden, analyst at CMC Markets, also said there were no strong reasons for either days’ moves:”The landscape hasn’t changed in the past 24 hours as there is still a possibility of a second wave of Covid-19 cases as countries reopen their economies.

“It is possible that yesterday’s move was just a knee-jerk reaction to the reports of rising cases, as traders have become accustomed to falling infection rates. “

He highlighted the fact that stocks were still down since Wednesday’s close.

Earlier, Asian markets reflected the downbeat trend overnight but were far less affected. IG said this highlighted the feeling that a potential second wave of coronavirus was more likely in the US or Europe.

Japan’s Nikkei ended down 0.75% at 22,305, while Hong Kong’s Hang Seng index fell 0.7% to 24,301.

Thursday’s falls on Wall Street followed a weeks-long rally that had helped shares recover some ground from the lows seen in March.

This rally was triggered by hopes that the US economy would rebound as authorities loosened restrictions put in place to try to slow the spread of the virus.

Last week’s surprise report showing US employers had restarted hiring in May helped to push the tech-heavy Nasdaq share index to new highs.

But the recovery remains tentative. On Thursday, the US Labor Department reported that another 1.5 million people had filed new unemployment claims last week. More than 30 million continue to collect the benefits, it said.

US Federal Reserve policymakers said on Wednesday that the unemployment rate could remain above 9% at the end of the year – close to the worst level of the financial crisis,

Several US states that have moved to ease lockdown restrictions, including Arizona and South Carolina, have seen an uptick in Covid-19 cases in recent days.

https://www.bbc.co.uk/news/business-53020775,

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