US stocks rise on hopes coronavirus is peaking
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US stocks rose at the open as investor confidence grew on hopes that the coronavirus outbreak was peaking.
The Dow Jones was up 0.9 per cent in early trading while the S&P 500 was up 0.8 per cent. The Nasdaq was 0.8 per cent higher. All three had finished marginally in the red yesterday.
European stocks were lower after rising yesterday, as France and Germany both tumbled into deep recessions.
The pan-European Stoxx 600 was down 0.7 per cent, the German Dax was 0.6 per cent lower, and France’s CAC 40 was down 0.9 per cent. The UK’s FTSE 100 had fallen 1.3 per cent.
It has been a choppy week for global stock markets, as optimism that coronavirus cases are reaching their peak has clashed with fears over the economy.
Trump yesterday said the US could be reaching the top of the coronavirus outbreak “curve”. Many governors have said they have also seen signs of cases peaking.
However, great uncertainty about the virus remains. New York and several other states yesterday recorded their highest number of daily coronavirus deaths.
“I understand why we’re maybe seeing a bit of a relief rally,” said Craig Erlam, senior market analyst at Oanda.
Stocks surged on Monday as it appeared the spread of coronavirus through Europe was slowing and countries contemplated easing lockdown measures.
Erlam said: “For one, a near 40 per cent drop from peak to trough across various indices, including the Dow and FTSE 100, means stocks are trading at a heavy discount.”
Yet investors in European stocks were shaken by analysis that said both Germany and France are in deep recessions.
France’s central bank estimated that French GDP fell six per cent in the first quarter of the year due to coronavirus lockdown measures.
A collection of German think tanks said Germany’s economy would shrink by 9.8 per cent in the second quarter.
The dollar strengthened marginally as uncertainty returned to the markets. It was up 0.1 per cent on the dollar index.