NEW YORK (AP) – Wall Street rallied back from a sharp, early slump on Monday to notch modest gains after the Federal Reserve unveiled its latest push to prop up the economy.
The S&P 500 climbed 0.8% in the latest day of big swings for global markets, as a remarkable, weekslong rally shows some cracks. Worries are rising that additional waves of coronavirus infections could derail the swift economic recovery that Wall Street just a week ago had seemed so sure was on the way.
When trading began in New York, those worries seemed set to drag the U.S. stock market to a loss following sharp declines in Asia and more modest ones in Europe. The S&P 500 quickly fell 2.5%, with stocks that most desperately need the economy to reopen hit particularly hard.
But some investors took advantage of the nervousness and bought stocks, which helped trim the S&P 500’s losses as the day progressed, before it popped decisively higher after the Fed announced in the afternoon that it will buy individual corporate bonds. The purchases will be part of its previously announced program to keep lending markets running smoothly, which allows big employers to get access to cash.
They’re also the latest reminder that the Fed is doing everything it can to help support markets, analysts said. Central banks have repeatedly come to the economy’s rescue over the years, and it was huge, unprecedented moves by the Fed earlier this year that helped put a halt to the S&P 500’s nearly 34% sell-off on worries about the recession coming out of the coronavirus pandemic.