By Yasin Ebrahim
Investing.com – The S&P ended Thursday higher, capping off a shortened trading week with its biggest weekly gain since 1974 as the Federal Reserve delivered another wave of stimulus to cushion the economic impact from the Covid-19 pandemic.
The S&P 500 gained 1.45%, taking its gains for the week to 12.1%, its biggest one-week rally since 1974. The Dow rose 1.22%, or 286 points, and the Nasdaq Composite added 0.77%.
Just weeks after its unprecedented measures to avert a financial crisis, the Federal Reserve intervened again, unveiling a $2.3 trillion stimulus package to not only create new loan programs but bolster current lending facilities too.
For the first time ever, the Fed offered loans – up to $500 billion - to states and municipalities and the central bank also expanded its bond-buying program to include both high-yield bonds and high-yield exchange traded funds (ETFs).
Following the Fed's move, Chairman Jerome Powell reassured investors the central bank is willing to continue to use its powder to pave as smooth a path for the economic recovery as needed.
"We will continue to use these powers forcefully, proactively and aggressively until we are confident that we are solidly on the road to recovery," Powell said.
Powell also said he saw no reason for banks to cut dividends as they are well-capitalized.
Wells Fargo (NYSE:WFC) rallied 9.6% JPMorgan Chase (NYSE:JPM) surged 9%, and Bank of America (NYSE:BAC) was up 6%.
OPEC and its allies also garnered some of the spotlight as oil prices reversed sharply amid fears the coordinated supply cut agreement would do little offset a widely expected supply overhang in the wake of a coronavirus-led hit to demand.
OPEC delegates agreed to reduce total output by 10 million barrels a day in May and June with Saudi Arabia cutting 3.3 million barrels and Russia cutting 2 million barrels, The Wall Street Journal reported.
WTI futures settled at $22.76, down 9.29% after surging more than 12% intraday, forcing energy to cut gains to end down 1%.