Mar 24, 2020 9:00 PM

Dow has best day since 1933 as Congress nears deal on aid

Posted Mar 24, 2020 9:00 PM
Image courtesy New York Stock Exchange
Image courtesy New York Stock Exchange

NEW YORK (AP) — The Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal on Tuesday to inject nearly $2 trillion of aid into an economy ravaged by the coronavirus.

The Dow burst 11.4% higher, while the more closely followed S&P 500 index leapt 9.4% as a wave of buying around the world interrupted what has been a brutal month of nearly nonstop selling. Despite the gains, investors were far from saying markets have hit bottom. Rallies nearly as big as this have punctuated the last few weeks, and none lasted more than a day.

Both Democrats and Republicans said Tuesday they’re close to agreeing on a massive economic rescue package, which will include payments to U.S. households and aid for small businesses and the travel industry, among other things. A vote in the Senate could come later Tuesday or Wednesday.

Investors have been waiting in frustration for such aid, particularly as the Federal Reserve has done nearly all it can to sustain markets, including its latest round of extraordinary aid launched Monday.

“I don’t think there’s any more confidence in the fundamental outlook, but the fact that we’re making progress is good news,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “It’s sort of like, keep the patient alive in the emergency room so you can provide some treatment options.”

The Dow rose 2,112.98 points, its biggest point gain in history, to 20,704.91. The S&P 500, which is much more important to most 401(k) accounts, rose 209.93, or 9.4%, to 2,447.33 for its third-biggest percentage gain since World War II. The Nasdaq composite jumped 557.18 points, or 8.1%, to 7,417.86.

The buying circled the world. South Korean stocks surged 8.6%, Germany’s market jumped 11% and Treasury yields rose in a sign that investors are feeling less fearful.

The market has seen rebounds like this before, only for them to wash out immediately. Since stocks began selling off on Feb. 20, the S&P 500 has had six days where it’s risen, and all but one of them were big gains of more than 4%. After them, stocks fell an average of 5% the next day.

“One of the things to be careful about is thinking this will be the panacea or that this fiscal response will be sufficient,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.

Ultimately, investors say they need to see the number of new infections peak before markets can find a floor. The increasing spread is forcing companies to park airplanes, shut hotels and close restaurants to dine-in customers.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. Those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems. Recovery could take six weeks in such cases.

Economists are topping each other’s dire forecasts for how much the economy will shrink this spring due to the closures of businesses, and a growing number say a recession seems inevitable.

Some of the market’s areas hardest hit by the closures, though, led the way higher Tuesday as expectations rose for incoming aid from the U.S. government.

Norwegian Cruise Lines, MGM Resorts and American Airlines Group were all up at least 33%. Energy companies and banks were also strong, though all remain well below where they were a month ago.

Governments and central banks in other countries around the world are unveiling unprecedented levels of support for their economies in an attempt to limit the scale of the upcoming virus-related slump. Germany, a bastion of budgetary discipline, also approved a big fiscal boost.

The gains came even as the first reports arrived showing how badly the outbreak is hitting the global economy. In the United States, a preliminary reading on business activity in March showed the steepest contraction on record, going back to 2009. Reports were also gloomy for Europe.

“Everyone was prepared for a set of shockers, and that is precisely what we got, but they are not a surprise,” said Chris Beauchamp, chief market analyst at IG. “It is at times like this that the market’s propensity to look forward is demonstrated most effectively.”

More dour data is nearly assuredly on the way. On Thursday, economists expect a report to show the number of Americans applying for jobless claims easily set a record last week. Some say the number could be way beyond 1 million, amid a wave of layoffs, topping the prior record of 695,000 set in 1982.

Helping to lift sentiment in markets is news from China that it is preparing to lift the lockdown in Wuhan, the epicenter of the outbreak, and from Italy reporting a reduction in the number of new cases and coronavirus-related deaths.

“It’s still early days, of course — perhaps investors can start to envisage life beyond the coronavirus,” said Craig Erlam, senior market analyst at OANDA Europe. “That could make stocks look a little more attractive, although anyone jumping back in now will need to have nerves of steel.”

Despite Tuesday’s big gains, it’s no time to get complacent, said Adam Taback, chief investment officer for Wells Fargo Private Bank.

“We would caution that the danger is not all behind us at this point,” he said. “We still have not seen numbers that give us an indication of just how bad things are. Today was a good day, but we would not necessarily see this as turnaround time.”

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Mar 24, 2020 9:00 PM
UPDATE: What Kansans need to know about the COVID-19 coronavirus
Health officials say one way to stop the spread of the new coronavirus is to wash your hands for at least 20 seconds. Celia Llopis-Jepsen / Kansas News Service

Kansas News Service

The new coronavirus is spreading quickly around the world, including across Kansas, and setting off a range of responses.

The Kansas News Service is boiling down key developments in the state and updating the status regularly here. To read this information in Spanish, go here. This list was last updated at 2:10 p.m. March 31.

CASES AND DEATHS

430 cases, including two from out of state (see map for counties)

9 deaths (4 in Wyandotte County, 3 in Johnson County, 1 each in Sedgwick and Crawford counties)

NOTE: These figures only include cases confirmed with lab tests and do not represent the real, unknown total. Community transmission is occurring in parts of Kansas.

STATEWIDE ORDER TO STAY HOME

Gov. Laura Kelly is instituting a statewide stay-at-home order as of 12:01 a.m. March 30. It will last until at least April 19. Stay-at-home orders allow people to take care of essential activities (such as grocery shopping or going to work) as well as exercise outside, but otherwise keep to themselves. 

The state’s stay-at-home order supersedes at least 13 county-by-county orders. Should the state’s order lift before a county’s is through, the county can choose to keep its own in effect.

SHOULD I SELF-QUARANTINE?

For the whole state: The Kansas Department of Health and Environment (KDHE) is now mandating home quarantine for 14 days if you've traveled to the places listed below. If you come down with symptoms (such as a fever of 100.4 degrees or higher, coughing or shortness of breath) during those 14 days, contact your health care provider and explain your potential COVID-19 exposure.  

  1. Louisiana or anywhere in Colorado on or after March 27.
  2. States with known widespread community transmission (California, Florida, New York and Washington) on or after March 15.
  3. Illinois or New Jersey on or after March 23.
  4. Eagle, Summit, Pitkin and Gunnison counties in Colorado (if your visit was March 8th or later).
  5. Cruise ships or river cruises on or after March 15. Anyone previously told to quarantine because of their cruise ship travel should also finish out their quarantine.
  6. International destinations on or after March 15. Anyone previously told to quarantine because of their international travel should also finish out their quarantine.

TESTING AVAILABILITY

As of March 27, Kansas health secretary Lee Norman said the state lab was handling 175 samples a day. But Kansas will receive more equipment within about a week that will let it handle 700 to 1,000 samples daily, though shortages of specialized supplies such as nose swabs may still hamper work at times. 

Norman said there’s enough capacity in the state, now that testing has ramped up through commercial labs and hospitals. State testing is reserved for high-risk groups, such as sick nursing home residents and health care workers. Others can ask their doctor or nurse practitioner to order through private labs.

What Kansas still lacks is enough testing material to study COVID-19 rates among people without symptoms.

KANSAS HAS DECLARED A STATE OF EMERGENCY. WHAT DOES THAT MEAN?

It gives the state government more power to marshal resources and triggers the state's response plan. The state Legislature has extended Kelly's declaration through May (and can extend it), with the aim of giving her the ability to make certain decisions when lawmakers aren’t in session.

On March 22, Kelly eased state rules to expand the use of telemedicine, to temporarily license more health workers and to allow heavier trucks on Kansas highways hauling relief supplies. On March 23, she ordered a ban on evictions if a tenant was unable to pay because of the coronavirus crisis. And she extended the income tax filing deadline to July 15, in line with a delay for filing federal tax forms.

HOW ARE UNIVERSITIES RESPONDING?

K-State, University of Kansas and Wichita State: All of them will go fully online for the end of the school year. Students at K-State and KU will need special exemptions to remain in dorms.

Other colleges: Washburn and Fort Hays State are online. Newman University expanded spring break for two weeks (March 14 to March 29). Johnson County Community College will close campus from March 14-29, and all courses will restart online March 30. Pittsburg State started break a day early and will resume classes indefinitely online on March 30.

HOW ABOUT K-12 SCHOOLS?

Gov. Laura Kelly and Kansas Education Commissioner Randy Watson have shut down all K-12 schools, public, private and parochial, for the rest of the 2019-20 school year. They had initially issued a strong recommendation that schools close March 16 through 20. 

Some county health departments had already issued similar orders. 

A Kansas State Department of Education task force has issued guidance to school districts on how to continue some amount of student learning. 

WHAT’S BEEN CANCELED OR SUSPENDED?

The governor’s executive order temporarily banning landlords from evicting businesses or residential tenants is effective until May 1. That same order put in a moratorium on any mortgage foreclosures through the same period.

The governor mandated on March 23, through an executive order, that gatherings be restricted to less than 10 people.

Kansas state workers: Access to the Statehouse is limited to official business only, and lawmakers went on break early. Kelly wanted most state employees to stay home for at least two weeks starting March 23.

State prisons: The Kansas Department of Corrections ended visitation at all state facilities, and will “re-evaluate on an ongoing basis.” It urges families to talk to inmates through email, phone calls and video visits. 

Electric companies: Evergy, which serves 950,000 customers in Kansas, will not disconnect residential or business services for an unspecified amount of time due to the “unprecedented challenge” of coronavirus that “may result in customers facing unexpected or unusual financial strain.”

Casinos: All four state-owned gaming facilities will close at the end of business on March 17, and remain so until at least March 30.

Public events: Many events and public places around the state have been canceled until at least the end of March. 

Sports: The Kansas State High School Athletics Association canceled the state basketball tournament midway through it. And the Big 12 suspended spring sports until March 29.  

HOW BAD IS THE VIRUS? 

COVID-19 usually causes mild to moderate symptoms, like a fever or cough. Most people with mild symptoms recover in two weeks. More severe cases, found in older adults and people with health issues, can have up to six weeks’ recovery time or can lead to death.

HOW CAN YOU AVOID IT?

  1. Wash your hands for at least 20 seconds. Frequently.
  2. Cover your coughs.
  3. If you’re an older Kansan or medically fragile, put off any vacations and limit your trips to the grocery store or any public space.
  4. Stay home if you are sick — this goes for all ages.

FOR MORE INFORMATION ON COVID-19

Kansas Department of Health and Environment: http://www.kdheks.gov/coronavirus/

The Centers for Disease Control and Prevention: https://www.cdc.gov/coronavirus/2019-nCoV/index.html

The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.