Dow up more than 1,000 points on spending, stimulus and Joe Biden’s showing

U.S. stocks surged after Congress agreed to an emergency spending bill to combat the spread of the coronavirus. Bonds continued to rally after the Federal Reserve’s rate cut.

The S&P 500 rose for the second time in three days, taking its rebound from the worst week since the financial crisis to almost 6 per cent, after Congress authorized nearly US$8 billion for virus prevention. Stocks opened higher on speculation other central banks and governments would provide stimulus as the outbreak claimed more lives and new cases piled up. Joe Biden’s surprise surge in Tuesday’s presidential primaries added to bullish sentiment. The equity benchmark is still 7 per cent below its February record.

Stocks tumbled Tuesday after the Fed’s move wasn’t followed by other Group of Seven nations with rate cuts or fiscal stimulus in the face of the virus’s growing threat to the global economy. But equities got a boost after the Bank of Canada cut its benchmark Wednesday, and amid speculation the Bank of England and the European Central Bank would also take action.

Ten-year Treasury yields pushed back above 1 per cent, while two-year dropped to 0.66 per cent. The low rates also helped breath new life into corporate bond deals after a days-long hiatus.

Part of the rebound also came from Biden’s surprise win, particularly in corners of the market most sensitive to the race’s outcome. Managed-care providers, threatened by Senator Bernie Sanders’s “Medicare for All” platform, surged, with UnitedHealth Group Inc. and Anthem Inc. each gaining more than 10 per cent.

“It looks like a combination of two things: to me, Biden’s showing on Super Tuesday is really an unexpected surprise, a positive surprise to the markets because I think markets always prefer a more moderate centrist Democratic nominee,” Deepak Puri, Americas CIO at Deutsche Bank Wealth Management, said by phone. “The other is the G-7 coordinated fiscal and monetary policy easing, which is on top of the 50 basis-point rate cut by the Fed announced yesterday. I think the market was initially a little bit taken aback by the rate cut announcement, but now that it’s had some time to digest, it’s starting to feel that the Fed is going to do whatever it takes to again stabilize the demand and supply shock.”

Investors are anxious for promised action by the Group of Seven to confront the virus while they’re buying risk assets on dips and watching the world’s biggest bond market move closer to negative yields. The Democratic contest posed a fresh challenge to Trump as nine states went to Biden, who’s positioned as a moderate against a more progressive Sanders in the race for the party’s nomination to take on Trump in November.

These are the main moves in markets:


  • The S&P 500 Index advanced 4.2 per cent as of 4 p.m. New York time.
  • The Dow Jones Industrial Average gained 4.5 per cent.
  • The Stoxx Europe 600 Index rose 1.4 per cent.
  • The U.K.’s FTSE 100 Index added 1.5 per cent.
  • The MSCI Asia Pacific Index climbed 0.4 per cent.


  • The Bloomberg Dollar Spot Index increased 0.2 per cent.
  • The euro decreased 0.6 per cent.
  • The British pound rose 0.1 per cent.
  • The Japanese yen weakened 0.2 per cent.


  • The yield on 10-year Treasuries rose three basis points to 1.03 per cent.

  • The yield on two-year Treasuries fell three basis points to 0.67 per cent.

  • Germany’s 10-year yield fell one basis point to -0.63 per cent.


  • West Texas Intermediate crude fell 0.2 per cent at $47.07 a barrel.
  • Gold fell 0.2 per cent to $1,637.47 an ounce.

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