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Stocks - Wall Street Trims Losses as Powell Boosts Hopes of Fed Rescue

Stock MarketsFeb 28, 2020 03:10PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – Wall Street selling was stemmed Friday, as Federal Reserve Chairman Jerome Powell hinted at a rate cut after flagging the coronavirus as "evolving risk" to the economy.

The Dow Jones Industrial Average fell 615 points, though had been down more than 1,000 points at the open. The S&P 500 slipped 1.07% and Nasdaq Composite fell 0.22%.

For weeks, Wall Street has been upping bets on a Federal Reserve rate cut, with some pricing in three consecutive cuts starting as soon as March. Powell on Friday, in an unscheduled statement, stoked rate-cut hopes, saying the central bank would act to support the economy after he conceded that the coronavirus was a threat to the economy.

Goldman Sachs said today it estimates the Fed will cut rates by 75 basis points by June, indicating as many as three cuts, with the first cut expected to be delivered at its meeting next month.

The impromptu update from the Fed comes in the wake of a sharp uptick in cases in South Korea, as well as maiden infections reported in New Zealand and Nigeria. The World Health Organization on Friday raised its risk assessment of Covid-19 to a "very high" global level from "high" in late January, but stopped short of declaring a coming pandemic.

But inside of China, however, the pace of infections is slowing and authorities in the country have stepped up efforts to restore operations as factories reopen.

Apple’s factories in China are nearing full production, said Apple (NASDAQ:AAPL) CEO Time Cook, adding that he was “very optimistic” that China was getting a handle on the outbreak.

“It feels to me that China is getting the coronavirus under control. You look at the numbers, they’re coming down day by day by day.” Cook said.

After a brief foray into positive territory, Apple fell nearly 2%, triggering a u-turn in tech, with gains in Nvidia (NASDAQ:NVDA) and Micron (NASDAQ:MU) cut short.

Energy stocks were also on the backfoot, amid a steep selloff in oil prices amid fears of weaker oil demand as the virus outbreak has hurt travel and tourism activity.

Elsewhere, Beyond Meat (NASDAQ:BYND) slumped 17% after the company reported a surprise quarterly loss, which offset better-than-expected revenue.

Wayfair (NYSE:W) fell 13% after its quarterly earnings fell short of Wall Street estimates as costs continue to rise amid a recent ramp-up in hiring.

Stocks - Wall Street Trims Losses as Powell Boosts Hopes of Fed Rescue
 

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Comments (7)
Green Mango
Green Mango Feb 28, 2020 7:25PM ET
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Yes I trust Chinese government numbers. I will risk everything on that.
Dar Smith
Dar Smith Feb 28, 2020 7:25PM ET
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Agree. Being authoritarian, they have much more control over these types of things and have a long history of accurate reporting
Charlotte Col
Charlotte Col Feb 28, 2020 7:25PM ET
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Sell my left bo ob and buy more stock
Herman Böök
Herman Böök Feb 28, 2020 6:52PM ET
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S&P 500 was hanging by a thread from the end of Thursday, and Fed's statement and its timing was just brief artificial respiration, had to be done. The actual content of the statement is utter garbage and Fed cannot save the US stock market, whatever they are planning on doing.
Herman Böök
Herman Böök Feb 28, 2020 6:51PM ET
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S&P 500 was hanging by a thread from the end of Thursday, and Fed's statement and its timing was just some artificial respiration, had to be done. The actual content of the statement is utter garbage and Fed cannot save the US stock market, whatever they are planning to do.
Bob Blahblah
Bob Blahblah Feb 28, 2020 3:49PM ET
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just go home hack
Biji Rajaku
Biji Rajaku Feb 28, 2020 2:29PM ET
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I feel this virus want to teach us dont be greedy, stop war, stop doing bad for human kind. Agree?
Timothy Yap
Timothy Yap Feb 28, 2020 2:29PM ET
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True
Stanislav Ivanovskiy
Stanislav Ivanovskiy Feb 28, 2020 2:29PM ET
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Awwww That's so cute...But it doesnt work that way
edward gonzalez
edward gonzalez Feb 28, 2020 1:57PM ET
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-800 Dow lol yeah okay
Gary Smith
Gary Smith Feb 28, 2020 1:42PM ET
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BS. This thing is spreading worldwide and Tim Cook is saying China has it under control. Absolute rubbish.
Sam Crowther
Sam Crowther Feb 28, 2020 1:42PM ET
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Do you have any underunstanding of the amount of people on this earth? Hundreds even thousands of cases is nothing. H1N1 swine Flu killed 500,000 people in 2009 alone...do some research
Ondřej Kála
Ondřej Kála Feb 28, 2020 1:42PM ET
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Unless China's numbers are completely fake then it has already peaked in China.
scrappy coco
scrappy coco Feb 28, 2020 1:42PM ET
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Most China factory isn't working at this time.  The death numbers China gave are those who are luckily enough to get into the hospital. Luckily enough to be arranged to test if infected. And luckily to DIE on the bed of hospital.  The true number is way more than 10x of the reported. My sister work in China and flee back weeks ago. People died in the house, on the street, in front of the building. Corpse bag are not enough. Corpse Incinerator works 24 hours. You can check the pollution produce by burning body in Wuhan city. However I still put money on the stocks. China is just one country in the world and there are 300 more.
 
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