March 2, 2020 / 6:37 PM / 3 months ago

CORRECTED-US STOCKS-Wall St rebounds as investors buy the dip; stimulus measures in focus

(Corrects paragraph 7 to clarify Powell’s comments were made on Friday)

* Indexes up: Dow 2.88%, S&P 2.56%, Nasdaq 2.55%

* Tech sector biggest boost, Apple up 6%

* Forty Seven Inc hits record high on $4.9 bln offer

By Ambar Warrick and Sanjana Shivdas

March 2 (Reuters) - U.S. stock indexes rose sharply on Monday, prompted by bargain hunting and on reassurances by central banks that they stood ready to counter any economic impact from the coronavirus.

Technology stocks were the biggest boost to the S&P 500, with Apple Inc jumping 6.2% as it recovered from a more than two-month low.

All three indexes were set for their best day in nearly two months in volatile trading.

At 13:07 p.m. ET, the Dow Jones Industrial Average was up 730.64 points, or 2.88%, at 26,140.00, the S&P 500 was up 75.68 points, or 2.56%, at 3,029.90. The Nasdaq Composite was up 218.14 points, or 2.55%, at 8,785.51.

Wall Street had marked its biggest weekly decline since the 2008 financial crisis, sinking into correction territory on Thursday amid fears of a recession resulting from the epidemic.

“The selloff was so fierce last week that you do have some buy-the-dip investors emerging,” said Brent Schutte, chief investment strategist, Northwestern Mutual Wealth Management Company.

Wall Street’s drop earlier in the day followed data that showed Chinese factory activity contracted at its worst pace ever in February. Federal Reserve Chair Jerome Powell said on Friday the central bank would act as required to provide support.

The news led to a rise in bets in favor of an interest rate cut, with traders seeing a 100% chance of a 50 basis point rate cut at the Fed’s March meeting, according to CME Group’s FedWatch tool.

“The Fed can cut rates all it wants, that is not going to put a person in a factory producing a product if that person is quarantined,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“I don’t think (monetary policy) solves the problem... This particular one is both supply and demand, it will help but it won’t fix the problem.”

The Institute for Supply Management said domestic manufacturing activity barely expanded last month due to supply issues stemming from the virus outbreak.

Cancer drug developer Forty Seven Inc jumped 61.5% after larger peer Gilead Sciences made a $4.9 billion offer for the firm. Gilead rose 6.5% .

Advancing issues outnumbered decliners by a 3.40-to-1 ratio on the NYSE and by a 2.16-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and 17 new lows, while the Nasdaq recorded 22 new highs and 114 new lows. (Reporting by Ambar Warrick and Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur)

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