Wall Street reassured by the Fed



by Stephen Culp

NEW YORK (Reuters) – The New York stock Exchange ended higher Monday, boosted by announcements from the federal Reserve on its programme of purchases of corporate bonds, which have overshadowed the fear of a resumption of the epidemic related to the new coronavirus, with the increase of cases of contamination observed in the United States and China.

The Dow Jones has gained 157,62 points (0.62 per cent) to 25.763,16.

The S&P-500, wider, took 25,28 points, which is 0,83%, to 3.066,59.

The Nasdaq Composite, technology-intensive, advanced from his side of 137,22 points (1.43 percent) to 9.726,02 points.

After you have opened sharply in the red due to the increase in cases of infection with the novel coronavirus in many States in the us, and the discovery of a new outbreak in Beijing, Wall Street made a comeback in the wake of the clarifications provided by the Fed on the modalities of its interventions on the secondary market of the debt “corporate”.

The Fed said it would adopt an approach of index to build a portfolio more diversified, which has pleased investors.

“There is no doubt that the market has appreciated. Who doesn’t love more cake?”, said Robert Pavlik, head of investment strategy and a portfolio manager at SlateStone Wealth. “This is an incentive for traders to buy stocks and to take more risks because the Fed has placed a safety net for the bond market and maintained an increased level of control over interest rates.”

The federal Reserve also opened on Monday the registration process for banks wishing to participate in the loan program of $ 600 billion to companies of intermediate size, too large to qualify for another aid package for companies with fewer than 500 employees.

The cyclical and technology have supported the trend on Wall Street while the financial stocks have particularly benefited from the announcements of the Fed on the bonds of companies. Goldman Sachs and JPMorgan have taken respectively at 2.25% and 1.38%. The sectoral index of banks rose by 1.6%.

“The banks probably have a package of corporate debt on their balance sheets and now there is a buyer for it,” said Robert Pavlik.

To individual values, the laboratory Moderna has jumped by more than 7% following press information according to which Israel is in discussions advanced for him to buy a future vaccine against the coronavirus.

(French version-Bertrand Boucey)



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