Stocks open higher, lifted by efforts to fight pandemic

Photo: The Canadian Press

The rally in North American stock markets continued for another day as Canada's main stock index started the trading day higher, while U.S. markets also gained ground.

The S&P/TSX composite index was up 269.90 points at 14,195.61.

In New York, the Dow Jones industrial average was up 304.63 points at 23,738.20. The S&P 500 index was up 33.48 points at 2,783.46, while the Nasdaq composite was up 77.56 points at 8,168.46.

The Canadian dollar traded for 71.59 cents US compared with an average of 71.26 cents US on Wednesday.

Stocks opened higher on Wall Street after the Federal Reserve launched its latest aggressive effort to support the economy through the coronavirus outbreak.

The S&P 500 rose 1% early Thursday, adding to a stellar week for the market.

The central bank said it took actions to provide up to $2.3 trillion in loans to households, local governments and small and large businesses as the country tips into what economists say may be the worst recession in decades.

The Fed’s actions came as welcome news just as the government reported that another 6.6 million people applied for unemployment benefits last week.

Markets also pushed higher in Europe and Asia on Thursday on hopes that the pandemic is reaching a peak in some economies, while the price of oil rose as major crude-producing countries prepared to discuss output cuts.

Benchmarks rose in Frankfurt, London and Hong Kong and ended flat in Tokyo, with investors seemingly reassured by signs that coronavirus deaths and infections may be nearing a plateau in some of the world’s hardest-hit areas.

Germany's DAX advanced 0.4% to 10,372 while the CAC 40 in France shed 0.4% to 4,424. Britain's FTSE 100 picked up 0.7% to 5,719. U.S. shares looked set for gains, with the future for the S&P 500 up 0.4% and that for the Dow industrials gaining 0.2%.

Japan’s Nikkei 225 index was nearly unchanged, ending at 19,345.77, after the central bank governor said the economy faces “extremely high” uncertainty over the likely impact of the pandemic.

Recent upward swings in markets have dwarfed declines amid signs that deaths and infections may be nearing a peak or plateau in some of the world’s hardest-hit areas.

That's led some investors to begin looking to the other side of the economic shutdown that is gripping the world as authorities try to slow the spread of the coronavirus. The S&P 500 has jumped nearly 23% in the last two and a half weeks, building on earlier gains driven by massive amounts of aid promised by governments and central banks for the economy and markets.

“Risk assets continued to rally on the perception that the global economy will open up again quicker than expected," Stephen Innes of AxiCorp said in a commentary.