Stocks moved sharply higher in early trading on Friday, regaining ground following the sell-off seen over the past few sessions. The Dow is recovering from its worst day in nearly thirty years, which dragged the blue chip index down to its lowest closing level in nearly three years.
The major averages have pulled back off their best levels of the course of the morning but remain sharply higher. The Dow is up 637.28 points or 3 percent at 21,837.90, the Nasdaq is up 258.75 points or 3.6 percent at 7,460.55 and the S&P 500 is up 86.75 points or 3.5 percent at 2,567.39.
Bargain hunting contributed to the initial strength on Wall Street after the Dow suffered its biggest one-day percentage drop since the stock market crash of 1987 on Thursday.
Traders looked to pick up stocks at reduced levels following the recent sell-off, although they seem somewhat cautious amid lingering concerns about the coronavirus.
Adding to the positive sentiment, a coronavirus test developed by Swiss drug giant Roche has been granted emergency use authorization by the FDA.
The FDA said this is the first commercially distributed diagnostic test to receive emergency authorization during the coronavirus outbreak.
Roche said it is committed to delivering as many tests as possible and is going to the limits of its production capacity.
The emergency authorization of the Roche test comes amid rising concerns about the relatively low levels of coronavirus testing in the U.S.
In a post on Twitter, President Donald Trump seemed to blame his predecessor former President Barack Obama for the issues with testing.
“Their response to H1N1 Swine Flu was a full scale disaster, with thousands dying, and nothing meaningful done to fix the testing problem, until now,” Trump tweeted.
“The changes have been made and testing will soon happen on a very large scale basis,” he added. “All Red Tape has been cut, ready to go!”
In U.S. economic news, a report released by the University of Michigan showed a relatively modest deterioration in consumer sentiment in the month of March in light of the rampant fear over the coronavirus outbreak and the subsequent sell-off on Wall Street.
The report showed the consumer sentiment index slid to 95.9 in March after rising to 101.0 in February, although the index still came in above economist estimates for a reading of 95.0.
“Importantly, the initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession,” said Surveys of Consumers chief economist Richard Curtin.
He added, “Nonetheless, the data suggest that additional declines in confidence are still likely to occur as the spread of the virus continues to accelerate.”
Banking stocks are turning in some of the market’s best performances in morning trading, with the KBW Bank Index soaring by 8.7 percent after ending the previous session at its lowest closing level in well over three years.
Substantial strength is also visible among steel stocks, as reflected by the 7.2 percent spike by the NYSE Arca Steel Index. The index is bouncing off a four-year closing low.
Energy stocks are also seeing considerable strength on the day, rebounding along with the price of crude oil. Crude for April delivery is jumping $1.29 to $32.79 a barrel.
Computer hardware, transportation, semiconductor and software stocks are also seeing significant strength, moving sharply higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index tanked by 6 percent while China’s Shanghai Composite Index slumped by 1.2 percent.
Meanwhile, the major European markets have pulled back off their best levels but remain sharply higher. While the French CAC 40 Index has surged up 5.9 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both up by 4.8 percent.
In the bond market, treasuries are extending the pullback seen over the three previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.7 basis points at 0.896 percent.
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