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US indices show sharp increase after collapse due to coronavirus

UNITED STATES (OBSERVATORY NEWS) — Leading US stock indexes at the close of the exchange on Monday showed a sharp increase of 3.2-4.75% after a record collapse last week, according to exchanges.

Major US stock indexes on Monday rose after a sharp decline of more than 10% last week, which was associated with concerns about the impact of coronavirus on the US economy.

The market showed some recovery already last Friday, when the Fed issued an official statement on readiness to support the economy if necessary, and the support tools may also include the regulator’s return to lower the base rate.

At the close of the New York Stock Exchange as of 4:00 p.m. (0.00 Moscow time), the Dow Jones Industrial Average (DJIA) rose 4.75% to 26617.51 points, the NASDAQ high tech companies index increased 4.07% to 8916, 184 points, the index of the broad market S&P 500 – by 3.19%, up to 3048.36 points.

The last week of February was marked by strong volatility in world markets, including stock markets. The major US and European indices showed an average decline of 11-12% due to concerns that the coronavirus from China could restrain global economic growth due to its impact on production and the supply chain.

Markets now expect supportive measures from the US Federal Reserve System. According to the CME Group, analysts unanimously expect a rate cut in March immediately by 50 basis points from the current level of 1.5-1.75%. Following the April meeting, 72.9% of analysts expect a rate at 0.75-1%, the rest – at around 1-1.25%.

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