Stocks popped higher — reversing overnight declines — after the Federal Reserve jolted volatile markets in a good way with an expanded and unprecedented plan to pump up to $2.3 trillion into the economy.
Media stocks were big gainers.
The package uses some of the Treasury Department funds recently allocated by Congress under CARES Act to help households, companies and state and local governments. It agreed to buy municipal bonds to help states and larger counties and cities and to purchase lower-rated (junk) bonds of companies — something the Fed has never done before.
The news helped offset continuing gloom over unemployment, with 6.6 million new claims filed in the U,S for the week ended April 4 — and more than 16 million over three weeks as the coronavirus pandemic slowly shut down large chunks of the economy.
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The Dow Jones Industrial Average was up nearly 2% or 450 points in late-morning trading. There were very few losers among the 40 media and entertainment stocks tracked by Deadline from Live Nation (6%) to Cinemark (11% to Sinclair (9%), Lionsgate (10%) and AMC Networks (7%). Among the big caps, Disney and ViacomCBS were both up more than 5%. Disney announced Wednesday that streaming service Disney+ has passed 50 million paid subscribers since it launched in November.
Comcast firmed by 0.3%. WarnerMedia parent AT&T was up 1.3%.
The Fed said its Main Street Lending program will support up to $600 billion in loans to small and midsize businesses — defined as fewer than 10,000 workers with less than $2.5 billion in annual revenue. The firms must make reasonable efforts to keep all their employees, the Fed said.
The loans will be disbursed through eligible banks but backed by the Fed. The program is still being finalized and will solicit feedback from the public through April 16.
“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible,” Fed Chairman Jerome Powell said in a statement.
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