Another Rallying Week

By Nicholas Jasinski |  Thursday, April 9

Oil's Woes. Stocks ended the holiday-shortened week with another day of gains, but most of the action occurred in other markets today. Oil had a tumultuous session, soaring higher then plummeting on developments regarding potential supply cuts. And the Federal Reserve unveiled a raft of new lending and bond-buying programs meant to support the U.S. economy totaling $2.3 trillion.

The S&P 500 closed up 1.4%, capping off a 12.1% rise this week—its best since 1974, and in just four days to boot. Only 10 of the index's components closed lower this week than they started it.

The Dow Jones Industrial Average added 1.2%, to rise 12.7% this week, and the Nasdaq Composite climbed 0.8%, to bring its four-day gain to 10.6%. The small-cap Russell 2000 index was the biggest winner by far, up 18.5% this week—its largest on record.

The Russell popped 4.6% today after the Fed's big morning reveal, which includes a program aimed at providing deferrable loans to small and medium businesses. The central bank also plans direct lending to support markets for riskier corporate debt and ease funding strains for states and cities.

The moves go well beyond anything the Fed did during the financial crisis just over a decade ago. Alexandra Scaggs has more on the latest moves here.

That promise of additional economic support outweighed another miserable jobless claims report this morning: Somr 6.6 million people filed for unemployment benefits in the latest week—bringing the total over the past three weeks to almost 17 million.

Over in the global oil market, the commodity's price was buffeted by the trickle of news emerging from a virtual meeting of energy ministers from members of the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and ministers from other producers, like Russia. 

Oil soared over 10% after reports crossed the wires that a supply cut of as much as 20 million barrels a day could be on the table. That's 20% of global demand during normal times. Later on, however, reports emerged that the agreement involves just a collective 10 million barrels a day.

And these aren’t normal times. Coronavirus-related downturns in travel and economic activity have caused global demand for oil to plummet. The U.S. benchmark oil price—West Texas Intermediate—closed down 9.3%, at $22.76 a barrel.

Even after a 30% rally since the start of April, the price of oil is down more than 60% since the start of 2020. Avi Salzman has more on the outlook for oil here.