By David Randall
NEW YORK, April 22 (Reuters) - A jump in the price of oil
and the promise of more government stimulus to ease the economic
pain inflicted by the coronavirus pandemic helped calm global
equity markets Wednesday, prompting investors to edge out of
perceived safe havens like U.S. Treasuries.
U.S. crude CLc1 and Brent LCOc1 both rose more than 5%
after touching their lowest levels since 1999 on the prospects
of further production cuts to reduce the glut in the oil market.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 1.58% following a broad rally in Europe and slight losses
in Asia.
In early trading on Wall Street, the Dow Jones Industrial
Average .DJI rose 381.45 points, or 1.66%, to 23,400.33, the
S&P 500 .SPX gained 48.71 points, or 1.78%, to 2,785.27 and
the Nasdaq Composite .IXIC added 159.35 points, or 1.93%, to
8,422.58.
A historic two-day plunge in the oil market, which sent
futures contracts negative for the first time in history, had
erased more than 1,000 points from the Dow before Wednesday's
open. The U.S. Congress will pass a nearly $500 billion
coronavirus aid bill on Thursday, House Speaker Nancy Pelosi
said, that includes an additional $321 billion for a previously
set-up small business lending program that quickly saw its funds
exhausted. "Though this bill will address some of the shortfalls, this
will not likely be the end for stimulus," according to a note
from BofA Global Research, adding that the firm expects Congress
to pass another large package worth up to $1.5 trillion.
Gains in the oil market helped draw investors into riskier
assets, pulling government bond yields higher. Benchmark U.S.
10-year notes US10YT=RR last fell 10/32 in price to yield
0.6017%, from 0.571% late on Tuesday. European Union leaders will meet on Thursday to discuss
measures to increase aid to help the region cope with the
coronavirus outbreak.
Traders were also buoyed after Italy breezed through a major
debt sale on Tuesday and speculation continued that
the European Central Bank would provide more support measures.
U.S. crude CLc1 recently rose 21.43% to $14.05 per barrel
and Brent LCOc1 was at $20.88, up 8.02% on the day.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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