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Share Name Share Symbol Market Type Share ISIN Share Description
Arbuthnot Banking Group Plc LSE:ARBB London Ordinary Share GB0007922338 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  17.50 2.3% 780.00 765.00 795.00 0.00 0.00 0.00 1,136 16:35:18
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 0.0 6.2 41.2 18.9 119

Dow Industrials, S&P 500 Lose Early Gains After Fed Move

03/03/2020 3:53pm

Dow Jones News


Arbuthnot Banking (LSE:ARBB)
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By Akane Otani and Anna Isaac 

U.S. stocks spiked, then erased the entirety of a brief rally Tuesday after the Federal Reserve cut interest rates in a move meant to cushion the economy against economic disruptions due to the coronavirus epidemic.

Markets were volatile after the Fed's announcement. Stocks initially shot higher, propelling the Dow Jones Industrial average up more than 300 points. But within 15 minutes, the whole rally had faded, with the blue-chip average recently down 136 points, or 0.5%, to 26577.

The S&P 500 and Nasdaq Composite were both down 0.2%.

The Fed's move Tuesday wasn't entirely unexpected. Many investors have believed that due to the widening spread of the coronavirus epidemic, there was an increasing chance that the Fed would have to lower rates before its scheduled policy meeting later this month to help arrest a potential slowdown in economic growth.

"The markets really needed it," said Solita Marcelli, deputy chief investment officer for the Americas at UBS Global Wealth Management. "What the Fed has done is buy us time."

But investors noted that the rate cut won't have an immediate effect on the real economy. Rather, the cut will help deliver some reassurance to traders while officials figure out a more specific fiscal response to the coronavirus. In the meantime, it is likely that the number of coronavirus cases will continue to rise in the U.S., potentially triggering more swings in markets.

"We're still telling our clients to expect volatility. Right now there are too many unknowns about the impact," Ms. Marcelli said.

Earlier, global markets were volatile after finance ministers and central bankers from the Group of Seven countries said they were ready to use "all appropriate policy tools" -- including possibly fiscal stimulus measures -- to guard against economic risks from the coronavirus. The statement had come as a disappointment to investors because it lacked the more specific and detailed coordinated policy response they had sought.

"People will want to see something firm underneath the language," said Gregory Perdon, co-chief investment officer at Arbuthnot Latham investment management. "The proof is in the pudding, put some numbers on the table."

Hopes for a wave of stimulus helped drive the Dow up 5.1% on Monday, its biggest gain in more than a decade.

"This talk of concerted and coordinated action from central banks has had a reaction, but what form that takes, time will tell," said Russ Mould, investment director at AJ Bell. "Cutting interest rates is not going to make someone take a flight to Italy if they're too scared to do it."

Elsewhere, the Stoxx Europe 600 rose 2.6%.

Stock performance was more muted in Asia, as a strong rally faded through the course of the day. Hong Kong's Hang Seng Index closed mostly flat, while Japan's Nikkei 225 dropped 1.2% and China's Shanghai Composite closed 0.7% higher.

Xie Yu contributed to this article

Write to Akane Otani at akane.otani@wsj.com and Anna Isaac at anna.isaac@wsj.com

 

(END) Dow Jones Newswires

March 03, 2020 10:38 ET (15:38 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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