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business Wednesday 8 april 2020
ECB takes action to keep banks lending during virus crisis

By DAVID McHUGH panies and have less rea-
AP Business Writer son to restrict credit by call-
FRANKFURT, Germany (AP) ing in or not making loans.
— The European Central Banks are key for the Euro-
Bank took action Tuesday pean economy because
to support lending to com- they provide most of the
panies across the 19-coun- financing for companies, in
try eurozone by easing rules contrast to the U.S., where
for banks that tap the cen- borrowing on financial
tral bank for ready money. markets is more common.
The action comes amid The ECB also restored
widespread efforts by cen- Greek government bonds
tral banks such as the ECB to the approved collateral
and the U.S. Federal Re- list, opening up credit for
serve to keep the economy banks in Greece that hold
supplied with credit so that them.
businesses can weather a They had been excluded
devastating period of shut- from the list after the Greek
downs, travel restrictions debt crisis because they
and social distancing. were not rated investment
The Frankfurt-based central grade.
bank said it was temporar- The bank has already an-
ily easing collateral rules for nounced an 870 billion-eu-
lending to banks, meaning A nearly full moon sets over the buildings of the banking district and the European Central Bank, ro ($950 billion) program of
banks can now use a wider right, in Frankfurt, Germany, early Tuesday, April 7, 2020. Associated Press bond purchases to support
range of financial assets the economy through the
as collateral for short-term would get more money of collateral. easier for banks so they end of the year, as well as
central bank credit and loaned for a given amount The impact is to make life can keep lending to com- easing requirements.q

Wall Street’s rally fizzles as oil prices suddenly plunge

By STAN CHOE and ing recession is inevitable, for when stocks decline
ALEX VEIGA the stock market is looking 20% or more from a peak.
AP Business Writers ahead to when econo- "There's no guarantee that
NEW YORK (AP) — A big mies will reopen from their the worst is behind us, yet
rally on Wall Street is losing medically induced coma. traders believe that at
steam in afternoon trading A peak in new infections least there is some short-
Tuesday, undercut in part would offer some clar- term money to be made,"
by another plunge in the ity about about how long Stovall said.
price of oil. the recession may last and The Dow Jones Industrial
The S&P 500 had been up how deep it will be. Inves- Average was up 148 points,
as much as 3.5% early in the tors could then, finally, en- or 0.7%, to 23,828, and the
day, tacking more gains vision the other side of the Nasdaq was up 0.1%.
onto its 7% surge Monday economic shutdown, af- Oil prices have been even In this image taken from video provided by the New York Stock
following encouraging ter authorities forced busi- more volatile than the stock Exchange, Tommy Gannon, Assistant Supervisor, Facilities, rings
signs that the coronavirus nesses to halt in hopes of market in recent weeks as the opening bell at the NYSE, and recognizes the Sodexo food
pandemic may be close slowing the spread of the demand dries up for ener- services staff at Beth Israel Deaconess Medical Center in Boston,
to leveling off in some of virus. In the meantime, gov- gy amid a global economy Tuesday, April 7, 2020, in New York. Associated Press.
the hardest hit areas of the ernments around the world weakened by the corona-
world. But the gains mostly are approving or discussing virus outbreak. Russia and New York. The number of lion Americans applied for
evaporated in the after- trillions of dollars more of Saudi Arabia have also daily deaths rose in New unemployment benefits last
noon after the price of U.S. aid for the economy. been locked in a price war, York, the center of the U.S. week as layoffs sweep the
crude oil slid more than 7%. Many professional investors refusing to cut production outbreak, but other statis- country. That would bring
Energy stocks in the S&P 500 say they're wary of the re- even as the world is awash tics were more encourag- the total to nearly 15 million
were clinging onto a 2.9% cent upsurge and expect in excess oil. ing, including the average over the past three weeks.
gain after earlier being up more volatility ahead. But if Benchmark U.S. crude number of people hospital- Analysts also expect big
nearly 8%. That weighed on Tuesday's slight gains hold, oil fell $1.98 to $24.11 per ized each day. companies in upcoming
the overall market, and the it would be one of the few barrel. In China, the first Experts say more deaths weeks to report their worst
S&P 500 was up just 0.7%, as times the market has mus- country to lock down wide are on the way due to CO- quarter of profit declines in
of 2:52 p.m. Eastern time. tered a back-to-back gain swaths of its economy to VID-19, which has already more than a decade. Mas-
Earlier in the day, Wall Street since the coronavirus out- slow the spread of the vi- claimed at least 76,000 sive aid from the Federal
had surged to big gains as break caused it to start sell- rus, authorities reported no lives around the world. Reserve has helped smooth
markets around the world ing off in mid-February. new deaths over the past The U.S. leads the world in out snarled trading that
rallied for a second straight "We are still in what you 24 hours. Many experts, confirmed cases with more had beset lending markets
day following encouraging would call the relief rally off though, are skeptical of than 369,000, according earlier in the sell-off. Com-
signs that the coronavirus of the prior low," said Sam China's virus figures. to a tally by Johns Hopkins panies are coming back
pandemic may be close Stovall, chief investment Investors also see signals University. to the bond market to bor-
to leveling off in some of strategist at CFRA. He not- that the number of daily More economic misery is row, even some with "junk"
the hardest hit areas of ed that this kind of a rally is infections and deaths may also on the horizon. Econo- credit ratings, and investors
the world.. Even though common within deep bear be close to peaking or pla- mists expect a report on are actually lending them
economists say a punish- markets, Wall Street-speak teauing in Spain, Italy and Thursday to show that 5 mil- money again. q