NEW YORK (AP) — Stocks are opening sharply higher on Wall Street a day after the worst drop since 1987. The Dow Jones Industrial Average jumped 800 points, or 4% early Friday. That’s far less than half of what the index lost a day earlier. European markets surged about 7% a day after one of their worst drops on record. The wild swings continued as governments stepped up precautions against the spread of the new coronavirus and considered ways to cushion the blow to their economies. Asian markets ended a volatile day mostly lower. Central banks in China, Sweden and Norway also stepped in to support bond markets.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below:
European stocks rose Friday and Wall Street was set to gain on the open after turbulent trading in Asia and a day after the market’s worst session in over three decades.
Shares rose in Paris and London but fell 6.1% in Japan following Wall Street’s and Europe’s biggest drop since the 1987 Black Monday crash.
Friday the 13th brought wild swings for some markets as governments stepped up precautions against the spread of the new coronavirus and considered ways to cushion the blow to their economies.
More central banks, including those of China, Sweden and Norway, intervened to flood credit markets with liquidity, a day after similar interventions from the U.S. Federal Reserve and the European Central Bank.
Benchmarks in Japan, Thailand and India sank as much as 10% early in the day, but India’s Sensex gained 3.3% in afternoon trading. In Bangkok, the Thailand SET fell 1.3% after its 10% plunge triggered a temporary suspension of trading.
Markets worldwide have been on the retreat as worries over the economic fallout from the coronavirus crisis deepen and the meltdown in the U.S., the world’s biggest economy, batters confidence around the globe.
Gains in Europe were the latest chapter in a period of remarkable volatility for financial markets, with major indexes plunging into bear market territory at record pace.
In France, the CAC 40 was up 5.1% to 4,250 while Germany’s DAX climbed 4.2% to 9,545. Britain’s FTSE picked up 4.9% to 5,493.
U.S. markets looked set for a stronger start, with the future for the Dow Jones Industrial Average up 4.9% and the future for the S&P 500 advancing 5.1%.
Australia’s S&P/ASX 200 jumped 4.4% to 5,539.30 after state and territorial leaders agreed to raise spending to counter the impact of the viral outbreak that has spread from central China across the globe, infecting 128,000 people.
“The governor of the Reserve Bank made it very clear this morning the levers of fiscal policy need to do their job here,” Prime Minister Scott Morrison said after a meeting of top officials on Friday.
“We need to put budgets to work to keep people in work,” said Morrison, whose federal government has already pledged $11.4 billion in stimulus.
Losses narrowed in mainland China, where communities are recovering from the worst of the virus. The Shanghai Composite index fell 1.2% to 2,887.43. Hong Kong’s Hang Seng lost 1.1%, to 24,032.91.
The overnight sell-off on Wall Street helped to wipe out most of the big U.S. gains since President Donald Trump took office in 2017.
The S&P 500 plummeted 9.5%, for a total drop of 26.7% from its all-time high, set just last month. That puts it way over the 20% threshold for a bear market, officially ending Wall Street’s unprecedented bull-market run of nearly 11 years. The Dow Jones Industrial Average sank 2,352 points, or 10%, its heaviest loss since its nearly 23% drop on Oct. 19, 1987.
European markets fell 12% in one of their worst days ever, even after the European Central Bank pledged to buy more bonds and offer more help for the economy.
“Between the lack of a strong U.S. fiscal response and the latest travel ban for arrivals from Europe to the U.S., global markets appear to have been tipped over into a sell-everything mode,” Jingyi Pan of IG said in a commentary.
Not all markets have suffered equally, but many are down by double-digits from just weeks earlier. Thailand’s SET has lost nearly 40% and the Philippines’ benchmark is down more than 30%.
Overriding concerns about the actual impact on business and trade is pessimism over how the crisis is being handled, with the “sum of all fears are culminating with the view that policymakers remain well behind the curve,” said Stephen Innes of AxiCorp.
Despite the slight improvements in some markets, gloom prevailed in Asia on Friday. Tokyo’s close at 17,431.05 was its lowest in nearly four years. South Korea’s Kospi sank 3.4% to 1,771.44. Taiwan’s benchmark lost 2.8%, while most Southeast Asian markets fell 1-2%.
The worldwide rout has come amid cascading cancellations and shutdowns across the globe — including Trump’s suspension of most travel to the U.S. from Europe — and rising worries that the White House and other authorities around the world can’t or won’t counter the economic damage from the outbreak any time soon.
The coronavirus has killed more than 4,700, but for most people causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illnesses, including pneumonia. The vast majority of people recover from the virus in a few weeks.
Initially, many hoped the virus would be contained in China. But as the damage and disruptions from the outbreak mount, the combined health crisis and the market retreat have heightened fears of a global recession.
Just last month, the Dow was boasting a nearly 50% increase since Trump took the oath of office on Jan. 20, 2017. It officially went into a bear market on Wednesday, finishing down more than 20% from its all-time high. For the S&P 500, this is the fastest drop since World War II from a record high to a bear market.
In other trading, the oil market, which suffered huge shocks a week ago as Saudi Arabia and Russia clashed over output cuts, was holding steady.
U.S. benchmark crude erased early losses, gaining $1.77, or 5.6%, to $33.27 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the standard for international oil pricing, picked up $2.04, or 6.1%, to $35.26 per barrel.
The dollar rose to 106.45 Japanese yen from 104.63 yen late Thursday. The euro fell to $1.1165 from $1.1181.
The Associated Press receives support for health and science coverage from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.
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