Stocks Pare Drop Into Close to End Higher for Week: Markets Wrap

(Bloomberg) -- U.S. stocks staged a furious rally in the final hour of trading that cut in half a rout that reached 4% and left the S&P 500 higher after a tumultuous week dominated by fear the spreading coronavirus will upend global growth. Treasuries surged.

The S&P 500 slid 1.7% Friday and ended the week up 0.6%. Indexes were whipsawed over the past five days as the spreading virus shook investor confidence and spurred action from central banks and governments.

Treasuries fell to all-time lows, with the 10-year yield dropping as far as 0.66%. The dollar slid for the sixth time in seven days. West Texas crude plunged 10%, the biggest drop in more than five years. A derivatives index that investors use to hedge against losses rose the most since at least 2011.

Investors have grown increasingly anxious that the Trump administration’s preference for forgoing fiscal stimulus in favor of pressuring the Federal Reserve into more action will fall short of propping up the economy as airlines cancel routes and events get delayed around the nation.

“As long as we’re seeing cases climb, it’s going to drive volatility in the market,” Shawn Cruz, manager of trader strategy at TD Ameritrade, said by phone. “What you’re seeing is almost a coordinated response to try to counteract that drop in sentiment, the fear of what the actual economic impact’s going to be.”

While concerted efforts from central banks and governments to soften the blow from the virus spurred gains across equity markets earlier in the week, investors are back to taking risk off the table and piling into the world’s safest and most liquid assets. The number of coronavirus cases globally surpassed 100,000 as more infections were reported in the Europe and Iran.

Markets mostly shrugged off the latest U.S. jobs report, which showed the biggest gain in nearly two years, because it only reflected conditions before the virus outbreak began snarling global supply chains and intensified across America.

These are the main moves in markets:

Stocks

• The S&P 500 Index dropped 1.7% as of 4 p.m. New York time.
• The Dow Jones Industrial Average slid 1%.
• The Nasdaq Composite Index dropped 1.9%.
• The Stoxx Europe 600 Index fell 3.7%.
• Germany’s DAX Index declined 3.4%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%
• The British pound increased 0.7% to $1.3044.
• The euro advanced 0.6% to $1.1308.
• The Japanese yen strengthened 0.7% to 105.43 per dollar.

Bonds

• The yield on 10-year Treasuries fell 14 basis points to 0.77%.
• The yield on two-year Treasuries declined eight basis points to 0.51%.
• Germany’s 10-year yield decreased two basis points to -0.71%.

Commodities

• West Texas Intermediate crude fell 9.6% to $41.31 a barrel, the most since 2015.
• Brent crude settled down 9.4%, the most since December 2008
• Gold rose 0.4% to $1,674.40 an ounce.

©2020 Bloomberg L.P.