Kroger stock falls after Amazon announces major grocery expansion
* Markets gain on investor hope of monetary, fiscal stimulus
* U.S. stocks climb almost 5% but Europe closes lower
* Oil prices bounce 10% after huge drop; gold prices fall 1%
By Herbert Lash and Marc Jones
NEW YORK/LONDON, March 10 (Reuters) - Oil and global equity
markets charged back on Tuesday after the prior day's steep
losses as the world's biggest economies moved to cushion the
impact of the coronavirus, but stock gains in Europe failed to
hold as investors remained skittish.
The price of Brent crude climbed 10% on hopes a supply cut
deal could be rescued and most benchmark government bond yields
rose from record lows as governments outlined broad measures to
confront the epidemic's economic and human toll.
U.S. President Donald Trump said he will ask Congress for a
payroll tax cut and other "very major" stimulus moves to ease
the economic pain, but details were still forthcoming.
During a White House meeting with health executives, Trump
also said the U.S. administration intended to help airlines and
the cruise line industry. He later met with Republican senators
to discuss proposals for boosting the economy.
Japan unveiled a second package of measures worth about $4
billion in spending, focusing on support to small and midsized
firms. U.S. stocks jumped more than 3% at the open, pared gains to
trade briefly negative and then roared back to close up almost
5%. Investors hoped Monday's rout marks the low of a downturn
that has pushed Wall Street's major indexes close to a bear
market - defined as a decline of 20% from recent peaks.
"Investors are trying put a bottom in here," said Rick
Meckler, partner at Cherry Lane Investments in New Vernon, New
Jersey.
"It seems like that yesterday was such a collection of so
much bad news, it shocked the market down. Today with fresh eyes
people are picking out the names they think have dropped the
most," Meckler said.
The S&P 500 forward price-earnings ratio for this year fell
to 15.8 as of Monday, in line with the historic average and down
from 19.3 less than a month ago, according to Refinitiv.
Comments by Vice President Mike Pence that private U.S.
health insurance companies have agreed to cover coronavirus
treatment and waive co-payment fees for testing helped U.S.
stocks rebound.
On Wall Street, the Dow Jones Industrial Average .DJI rose
1,166.7 points, or 4.89%, to 25,017.72. The S&P 500 .SPX
gained 135.65 points, or 4.94%, to 2,882.21 and the Nasdaq
Composite .IXIC added 393.58 points, or 4.95%, to 8,344.25.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 2.55% but the pan-European STOXX 600 index .STOXX lost
1.14%, after initially trading higher. A jump in infections in
Italy, Germany and Britain unsettled investors.
The major European bourses remained in bear territory. The
FTSE 100 .FTSE in London almost eked out a gain but closed
down 0.1% as oil companies rebounded from the carnage on Monday
as Saudi Arabia and Russia engaged in a price war.
"Traders are a bit nervy, the only positive news we've been
getting out is probably rate cuts or tax cuts," said Michael
Baker, an analyst at ETX Capital in London.
"We need news in terms of the actual control of the virus,
which we don't seem to be having right now," he said.
Yields on benchmark U.S. 10-year Treasury debt more than
doubled to 0.801% and those on German Bunds jumped around 20
basis points at one point as investors pared some safe-haven
holdings, though they were beginning to ease again. GVD/EUR
Many strategists and economists expect the Federal Reserve
to cut U.S. interest rates to zero as part of a global move to
provide strength and liquidity to the financial system.
The dollar rallied after huge losses against the safe-haven
Japanese yen and Swiss franc, but analysts said it was too early
to predict a floor.
Stocks in Asia rebounded, with Japan's Nikkei .N225
closing up 0.85% after touching its lowest level since April
2017. .T
China's benchmark Shanghai Composite Index .SSEC traded
1.8% higher as new domestic coronavirus cases tumbled and
President Xi Jinping's visit to the epicenter of the epidemic
lifted sentiment.
The oil rally had the most horsepower. About half of oil's
massive losses from Monday were clawed back, offering hope that
markets had found a floor despite still-fragile sentiment.
Russian oil minister Alexander Novak said he did not rule
out joint measures with the Organization of the Petroleum
Exporting Countries to stabilize the market.
Benchmark Brent crude futures LCOc1 rose 8.3% to settle at
$37.22 a barrel, roughly half this year's peak, reached in
January. U.S. crude gained 10.4% to settle at $34.36. O/R
Gold prices fell 1%, retreating from the previous session's
jump above the key $1,700 level, as safe-haven demand waned a
little amid speculation about global stimulus measures. GOL/
U.S. gold futures GCcv1 settled down 0.9% at $1,660.30 an
ounce.
The bond market has priced in a global recession of unknown
length. Investors are fully pricing an easing of at least 75
basis points at the next Fed meeting on March 18, while a cut to
near zero was seen as likely by April. 0#FF:
Yields on 10-year U.S. Treasuries US10YT=RR dipped to as
little as 0.318% on Monday - a level unthinkable just a week ago
- but climbed back to 0.6787% on Tuesday amid the stimulus
chatter.
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
The U.S. dollar and 10-Year U.S real yields https://tmsnrt.rs/32WoiRq
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