U.S. stocks flipped between small gains and losses Friday, capping a turbulent week on hopes government and central bank action can shield the global economy from the coronavirus pandemic.
Members of President Donald Trump’s economic team were convening Friday on Capitol Hill to launch negotiations with Senate Republicans and Democrats racing to draft a $1 trillion-plus economic rescue package amid the coronavirus outbreak.
The Dow Jones Industrial Average dipped 12 points, after a relatively modest change a day earlier after wild price swings over the past week. The blue-chip average climbed 188.27 points Thursday to close back above 20,000. The Standard & Poor’s 500 slipped 0.2%. Both were on pace for weekly losses of at least 11%.
The Nasdaq Composite climbed nearly 1%, driven by a rise in technology shares.
“The one glimmer of light in this dark period is that Asia and its supply chain is recovering quicker than expected,” says Daniel Ives, an analyst at Wedbush Securities. “Even though consumers and investors across the U.S. and Europe are in lock down, we are seeing signs that the global supply chain is starting to normalize over the longer term.”
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Improvements to recent supply chain constraints will help drive growth across tech industries including chip makers, software firms and companies developing cellular technology known as 5G, Ives added.
On Friday, workplace-software maker Slack, software company DocuSign and Zoom Video Communications all jumped at least 6%.
“Investors are finding safety in this unprecedented market in some of the larger tech companies who have strong balance sheets that will not only survive, but look compelling at these valuations once we get on the other side of this pandemic,” Ives says.
Investors were also encouraged after seeing more steps by the Federal Reserve and other central banks and governments to support credit markets and the economy. The Fed said Friday it would extend its asset purchase program into short-term municipal bonds to keep credit flowing.
“Global markets have taken fright at the scale of potential economic damage wrought by the coronavirus containment measures,” analysts at BlackRock Investment Institute said in a note. “We see the economy coming to a near standstill but expect activity to ultimately return with limited permanent economic damage as long as authorities deliver an overwhelming fiscal and monetary policy response to bridge businesses and households through the shock.”
The U.S. dollar dropped from fresh highs, suffering its worst fall in more than four years after California Gov. Gavin Newsom issued a statewide order encouraging the state’s 40 million residents to stay at home starting late Thursday. That weighed on the dollar as worries grew that the world’s largest economy was headed for recession. The Bloomberg Dollar Spot Index fell as much as 1.8%.
Worldwide, the death toll has topped 10,000, with more than 244,500 confirmed cases, according to the Johns Hopkins University data dashboard. In the U.S., there were more than 200 deaths and over 14,000 confirmed cases.
In energy markets, benchmark U.S. crude gained $1.70 to $27.61 per barrel in electronic trading on the New York Mercantile Exchange. The contract clawed back some of its recent losses Thursday, surging nearly 24%. Brent crude, used to price international oils, added $1.59 to $30.06 per barrel in London.
In Europe, Germany’s DAX rose 4.2% while the CAC 40 in Paris added 5.5%. Britain’s FTSE 100 climbed 1.9%. Japan’s Nikkei 225 index gave up 1%. Hong Kong’s Hang Seng index rose 5.5%, and the Shanghai Composite index added 1.6%.
Contributing: The Associated Press