NEW YORK – Wall Street roared back from its worst day in 30 years Friday with a broad rally that sent the Dow Jones Industrial Average nearly 2,000 points higher – its biggest point gain ever – after President Donald Trump declared the coronavirus pandemic a national emergency.
Fueled by a late-day surge while Trump was speaking, the Dow saw its largest percentage gain since 2008. The rally recouped many of the losses from a day earlier, when the index experienced its worst slide since the Black Monday crash of 1987 and European indexes had one of the worst drops on record. The major indexes each closed with gains of more than 9%.
The session capped a dizzying week on Wall Street, with wild swings driven largely by uncertainty over how much damage the coronavirus would cause to the global economy. By Thursday, the Dow had suffered two drops of more than 2,000 points and the longest-ever bull market had ended.
Then on Friday, stocks rallied, shooting sharply upward in the last half-hour of trading as investors appeared to gain confidence that the Trump administration has a plan to combat the outbreak from both a health care and economic perspective.
Despite Friday's pickup, the market still ended the week with its second-worst weekly loss in the past 10 years. All the major indexes are in what traders call a bear market.
Investors have been clamoring for strong action from the U.S. government to combat the outbreak's effect on businesses and workers. News that the White House and Congress were close to an agreement on a package to provide sick pay, free testing and other resources helped boost the market in the morning.
On Friday night, Speaker Nancy Pelosi announced a deal had been reached with the Trump administration.
“We're finally getting that a little late to the party, but it's better to be late to the party then not to come to the party,” said Ryan Detrick, senior market strategist at LPL Financial. He said the stimulus plan should help cushion the financial effects on people and businesses.
In addition to declaring the national emergency, which frees up funds for states and cities to fight the virus, Trump also announced measures to shore up oil prices, ease the economic burden on students and improve the level of testing in the U.S. for the virus.
Trump's news conference helped reassure investors that the administration is now taking aggressive action to limit the spread of the virus, said Quincy Krosby, chief market strategist at Prudential Financial.
“What the market was focused on today was the containment of the virus. That's always been the top concern and a concern that the administration was behind the curve on,” Krosby said. She described the steps outlined as “positive and optimistic.”
“And that's exactly what the market needed and the country needed today,” she said.