United States stocks trade higher amid rallying health care shares

Thursday, 05 Mar, 2020

Health care stocks had the market's biggest gains after a strong performances by Joe Biden in state primaries on Tuesday moved him to top-tier contender status for the Democratic presidential nomination. The former vice president's more centrist policies have appealed to investors who are concerned that Mr. Sanders's pledges, welcomed by the party's left wing, wouldn't be favorable for businesses.

Asian stock marketplaces had been mostly greater Wednesday immediately after Wall Street sank inspite of an emergency USA curiosity minimize aimed at defusing fears a virus outbreak may depress world wide economic exercise.

Stocks rose on Wall Street early Wednesday to claw back some of their sharp losses from the day before in yet another day of big swings for the market.

The Dow Jones Industrial Average slipped 1.91 points to 26,701.41 while the S&P 500 fell 2.68 points to 3,087.55 and the Nasdaq Composite Index gained 2.87 points to 8,955.04. On Monday, the yield on the 10-year Treasury note, a benchmark for home mortgages and many other loans, was at a record low 1.09%, down from 1.14% Friday and 1.30% late Thursday.

Global financial markets have been rattled by the virus outbreak that began in central China and has been shutting down industrial centers, emptying shops and severely crimping travel all over the world. Canada's central bank cut rates on Wednesday, also by half a point and citing the virus' effect. The 10-year yield tends to fall when expectations are for weak economic growth and inflation. Gold, meanwhile, jumped 2.9% to settle at $1,644.40 per ounce. Apple climbed 3.4% and Microsoft rose 2.1%.

Even before Tuesday's announcement, traders believe he Fed will lower interest rates half a percentage point on March 18 at the next meeting. "You may see some rate cuts in the USA but rates are already pretty low in the rest of the world", said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

A U.S. Treasury spokesperson said that G7 finance ministers will hold a conference call Tuesday to discuss steps to deal with the economic impacts of the outbreak, and the call will be led by Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, Reuters reported.

On Tuesday, the Dow sank 2.9% and the Nasdaq composite index fell 3 percent. With Monday's surge, the S&P 500 is now 8.7% below the record high it reached February 19.

In early trading, London's FTSE 100 lost 0.3 percent to 6,700.71 while Germany's DAX rose 0.2 percent to 12,010.94. Japan's Nikkei 225 inched up 0.1%, the Hang Seng in Hong Kong slipped 0.2% and stocks in Shanghai rose 0.6%.

USA interest rate cut was the first Fed's regularly scheduled meeting since the 2008 global crisis.

Oil rebounded too, with the price of a barrel of Brent crude climbing 4% to $52 a barrel - having briefly fallen close to $48 overnight, its lowest level since July 2017.

Brent crude, the global standard, jumped $1.51 to $51.18 per barrel. Natural gas rose 4 cents to $1.80 per 1,000 cubic feet. Furthermore, as long as there is more of a "risk off" attitude around the world it makes sense that the Japanese yen would of course pick up a bit of momentum.

The euro slipped 0.11% at $1.1121 while the pound sterling rose 0.26% at $1.2787.