US Federal Reserve cuts benchmark interest rate to offset coronavirus impact

NEW YORK (AP) — Stocks got a boost Tuesday after the Federal Reserve made an emergency cut to interest rates in hopes of shielding the economy from the effects of the fast-spreading virus.

The S&P 500 was down as much as 1.3% in the first half hour, but it shot up to a gain of 1.5% after the Fed’s announcement, then was up 0.6% in mid-morning trading.

The index had surged 4.6% Monday in anticipation of moves by the Fed and other central banks to support the global economy following the worst week for stocks since the financial crisis of 2008.

Traders have been pushing the Federal Reserve and other central banks around the world to cut rates and offer other stimulus for the economy as the fast-spreading virus shutters factories, halts travel and damages confidence.

Central banks have been the ultimate backstop for markets throughout this bull market for U.S. stocks, which began in 2009.

But some critics say the medicine of lower interest rates won’t be as effective this time around because they won’t be able to re-open shut factories or call workers back from quarantines.

The Dow Jones Industrial Average was little changed as of 10:35 a.m. Eastern Time.

It had surged nearly 1,300 points the day before, or 5.1%.

It was the Dow’s biggest-ever point gain and its biggest percentage gain since March 2009.

European markets were also broadly higher. Asian markets climbed.

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