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Stocks claw back some ground on Wall Street after major European indexes climb

An early rally for US stocks came after the worst slide for the market since the Black Monday crash of 1987.

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New York Stock Exchange (AP Photo/Richard Drew)

New York Stock Exchange (AP Photo/Richard Drew)

New York Stock Exchange (AP Photo/Richard Drew)

Global financial markets have clawed back a small slice of their losses after a brutal week of selling as the spreading coronavirus heightened fear of a global recession.

The early rally for US stocks came after the worst slide for the market since the Black Monday crash of 1987.

Much of an early surge evaporated, leaving major indexes up about 4% in the early afternoon, or 900 points on the Dow Jones Industrial Average.

They had been up as much as 6% earlier.

Financial Markets Wall Street
The sell-off on Wall Street on Thursday ended Wall Street’s bull-market run of nearly 11 years (Richard Drew/AP)

Bond yields moved broadly higher, a signal some investors were pulling back, at least for now, from seeking less-risky assets.

The rally follows news that the Trump administration and House Democractic leaders are close to announcing an agreement on a coronavirus aid package aimed at reassuring anxious Americans by providing sick pay, free testing and other resources.

The wild swings came as governments stepped up precautions against the spread of the coronavirus and considered ways to cushion the blow to their economies.

More central banks, including those of China, Sweden and Norway, stepped in to support bond trading, a day after similar interventions from the US Federal Reserve and the European Central Bank.

Benchmarks in Japan, Thailand and India sank as much as 10% early in the day, but India’s Sensex gained 3.3% in afternoon trading. In Bangkok, the Thailand SET fell 1.3% after its 10% plunge triggered a temporary suspension of trading.

HEALTH Coronavirus
(PA Graphics)

Markets worldwide have been on the retreat as worries over the economic fallout from the coronavirus crisis deepen.

The gains in Europe were the latest chapter in a period of volatility for financial markets, with major indexes plunging into bear market territory at record pace.

Australia’s market jumped 4.4% after state and territorial leaders agreed to raise spending to counter the impact of the viral outbreak that has spread from central China across the globe, infecting 128,000 people.

Losses narrowed in mainland China, where communities are recovering from the worst of the virus. The Shanghai Composite index fell 1.2%.

The sell-off on Wall Street on Thursday helped to wipe out most of the big US gains since President Donald Trump took office in 2017.

The S&P 500’s drop put it way over the 20% threshold for a bear market, officially ending Wall Street’s unprecedented bull-market run of nearly 11 years.

Despite the slight improvements in some markets, gloom prevailed in Asia on Friday. Tokyo’s close was its lowest in nearly four years, and South Korea’s Kospi sank 3.4%.

PA