Intel stock extends gains after report of possible U.S. government stake
* European, US stocks recover on govt spending hopes
* MSCI's world equity index down 16% so far this week
* Italian govt debt hit again as death toll passes 1,000
* European shares steady on stimulus hopes
* World FX rates year-to-date http://tmsnrt.rs/2egbfVh
(Updates prices, comments; changes byline, dateline from
previous LONDON)
By Rodrigo Campos
NEW YORK, March 13 (Reuters) - Stocks across the globe
bounced back on Friday after historic drops, but hopes of more
central bank stimulus and government spending went only so far
and the comeback lost steam in a week of pandemic panic-selling
across markets.
Volatility is expected to remain high, with sharp moves
expected in both directions and across asset classes. The S&P
500 rose as much as 6.1% intraday on Friday and was last up
0.6%.
Stocks rose Friday on hopes of a coordinated stimulus
package from world governments in response to the coronavirus
pandemic, which threatens to slow down the global economy.
"What we're headed for is a market that should begin to
settle down (with) investors now expecting the government to get
the economic plan in place and get it into law," said Peter
Cardillo, chief market economist at Spartan Capital Securities
in New York.
The Dow Jones Industrial Average .DJI rose 118.69 points,
or 0.56%, to 21,319.31, the S&P 500 .SPX gained 14.98 points,
or 0.60%, to 2,495.62 and the Nasdaq Composite .IXIC added
23.93 points, or 0.33%, to 7,225.73.
On Thursday, the Dow dropped 10%.
The pan-European STOXX 600 index .STOXX rose 0.10% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.17% after falling by the largest percentage on record on
Thursday.
Italy and Spain meanwhile imposed trading curbs, banning
short-selling of dozens of stocks. "Markets are quite prepared for a period of falling output.
The real fear is that you get second-round effects that result
in a nastier, longer recession in the global economy," said
Investec economist Philip Shaw.
"That is going to be very difficult to escape from given the
monetary pedal is very close to the floor in many
jurisdictions."
Earlier, Japan's Nikkei .N225 fell 10% before paring
losses to close 6% lower. Australia's S&P/ASX200 .AXJO had its
wildest trading day on record, falling past 8% before surging in
the last minutes of trade to settle 4.4% higher at the close.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS ended less than 0.1% higher after falling more
than 5% in morning trade.
The recovery came as central banks from the United States to
Australia pumped liquidity into their financial systems.
Treasury yields rose as liquidity remained scarce even
after the New York Federal Reserve's action to make a massive
amount of cash available.
Benchmark 10-year notes US10YT=RR last fell 5/32 in price
to yield 0.8673%, from 0.852% late on Thursday.
Justin Hoogendoorn, head of fixed income strategy and
analytics at Piper Sandler in Chicago, said there were "very
little bids" in the market.
"It really does scream volatility, scream that there's a
lack of liquidity in the marketplace," he said.
Italy, where the COVID-19 death toll shot past 1,000 people,
saw its borrowing costs spike by about 75 basis points this week
- the most for any week since 1994. Bond yields rose across the euro zone as investors'
expectations grew for fiscal stimulus in the region to combat
the coronavirus pandemic.
Oil prices were set for their biggest weekly slide since the
2008 financial crisis and erased their Friday bounce, as the
coronavirus outbreak threatened demand and crude producers
promised more supply.
U.S. crude CLc1 fell 0.89% to $31.22 per barrel and Brent
LCOc1 was last at $33.16, down 0.18% on the day.
Major currencies stabilized after furious dollar buying
overnight, but the yen felt the pressure of risk-on trading.
Market participants said signs of dollar funding stress
persist and policymakers probably need to do even more.
"Underlying concerns regarding the economic fallout from the
coronavirus on credit markets broadly remain," said Shaun
Osborne, chief FX strategist at Scotiabank in Toronto.
"It may be tempting to look for signs of a low in global
stocks but with the underlying issue - the coronavirus - still
unchecked, we think that is premature at this point," he added.
The dollar index =USD rose 0.946%, with the euro EUR=
down 0.85% to $1.1088.
The Japanese yen weakened 2.28% versus the greenback at
107.10 per dollar, while sterling GBP= was last trading at
$1.2451, down 0.95% on the day.
World stocks set for largest weekly drop since Oct 2008 https://tmsnrt.rs/2wPc5lV
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