Futures bounce after brutal selloff
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[March 24, 2020] By
Uday Sampath Kumar
(Reuters) - U.S. stock index futures jumped
5% to their daily upper trading limit on Tuesday, rebounding from a
brutal coronavirus-driven selloff on signs that Washington was nearing a
deal on a $2 trillion economic rescue package.
The S&P 500 <.SPX> and Dow Jones <.DJI> indexes closed about 3% lower on
Monday, as a rise in U.S. infections and lockdown in several states
overshadowed historic measures by the Federal Reserve to boost credit in
Traders said the central bank's measures and expectations of a
government stimulus package appeared to be easing some pressure on a
market that has seen one of the biggest routs in history.
But they remained doubtful of a long-lasting recovery without evidence
of a peaking in the number of new COVID-19 cases.
The benchmark S&P 500 has now lost about $10 trillion in value since
hitting a record high last month.
U.S. Treasury secretary Steve Mnuchin said late on Monday negotiations
on the rescue package had made significant progress and that a bill
could be passed as soon as Tuesday.
A separate proposal from Democrats in the U.S. House of Representatives
to grant airlines and contractors a $40 billion bailout helped lift
shares of American Airlines <AAL.O>, Delta Airlines <DAL.N> and United
Airlines <UAL.O> by about 10% premarket.
Boeing <BA.N> rose nearly 9% and was the top gainer among Dow
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Traders work on the floor of the New York Stock Exchange (NYSE) in
New York, U.S., March 20, 2020. REUTERS/Lucas Jackson
Meanwhile, a surge in oil prices lifted energy stocks, with oil majors Exxon
Mobil Corp <XOM.N> and Chevron Corp <CVX.N> rising more than 7%.
Big U.S. banks including Goldman Sachs <GS.N>, JPMorgan <JPM.N> and Citigroup <C.N>
rose about 6%, tracking an increase in the 10-year Treasury yield.
With much of the economic blow sliding into the second quarter, investors have
shrugged off latest figures showing sharp declines in business activity around
U.S. surveys of manufacturing and services sector activity, due later in the
day, are also likely to show a similar plunge.
At 06:44 a.m. EDT, Dow e-minis <1YMcv1> were up 930 points, or 5.03%, S&P 500
e-minis <EScv1> were up 113 points, or 5.09% and Nasdaq 100 e-minis <NQcv1> were
up 375 points, or 5.37%
SPDR S&P 500 ETFs <SPY.P> were up 5.34%.
The S&P 500 index <.SPX> closed down 2.93% at 2,237.4 on Monday.
(Reporting by Uday Sampath in Bengaluru; Editing by Sagarika Jaisinghani and
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