US stocks sharply rebounded on Monday, following a disastrous week that resulted in trillions of dollars in losses. The Dow Jones shot up by more than 1,200 points following confidence-bolstering statements from international institutions about their responses to the economic and pathological fallout of the COVID-19 outbreak.
As trading ended on Monday, the Dow Jones Industrial Average (DJIA) was nearly 1,300 points higher than where it opened, closing at 26,703.32 – a 5.09% jump. The S&P 500, which measures the performance of the market’s top 500 companies, was up 136.01 points, finishing at 3,090.23. The Nasdaq Composite, which follows common stocks and other securities, saw similar success, closing at 8,952.17 – 384.8 points above Friday’s close.
According to Forbes, global stocks suffered their worst combined losses last week since 2008, destroying $5 trillion worth of wealth.
Monday statements from the Bank of Japan, US Federal Reserve and International Monetary Fund all reaffirmed investor confidence in a coordinated response to the economic impacts of the coronavirus. Travel has been sharply curtailed to and from countries and regions where the virus is concentrated, including Italy, South Korea, China and within China, the central province of Hubei, the epicenter of the outbreak and where Wuhan is under quarantine.
“I wouldn’t put too much into this,” Peter Cardillo, chief market economist at Spartan Capital Securities, told CNBC Monday. “Although I think we’re getting close to putting in a bottom, I still think we need to drop another 2% to 3% to have some sort of capitulation.”
“If the central banks intervene that is great and I appreciate that, but will this fix the problem?” Andrea Carzana, an equity fund manager for Columbia Threadneedle Investments, told the Wall Street Journal. “If companies need to shut down because of the virus it doesn’t really matter how much liquidity you put into the system.”