Stocks rally after UK introduces bond bailout plan

US stocks rallied on Wednesday after Britain’s central bank announced plans to buy government bonds to calm markets roiled by the country’s recent tax cuts.

The Dow Jones Industrial Average rose 546.77 points, or 1.88%, to 29,681.76. The S&P 500 was up 71.38 points, or 1.96%, to 3,718.67 and the Nasdaq Composite was up 222.13 points, or 2.05%, to 11,051.64.

The rally helped reverse a week of steady declines in markets amid concerns about inflation and recession. US markets continued the sell-off on Friday after the new UK government announced a series of tax cuts that included disruptions to businesses and new home buyers.

“Should dysfunction in this market persist or worsen, there would be a significant risk to UK financial stability,” Britain’s central bank said in a statement on Wednesday, outlining its bond buyback plan. “This would lead to an unwarranted tightening of financing conditions and a reduction in the flow of credit to the real economy.”

Some analysts and investors remain pessimistic about the US economy.

“Our central case is a hard landing by the end of 2023,” billionaire investor Stanley Druckenmiller told CNBC on Wednesday. “I will be stunned if we don’t have a recession in 2023. I don’t know when, but certainly by the end of 2023. I won’t be surprised if it’s not larger than the so-called average garden variety.”

Biogen (BIIB) shares rose $78.82, or 39.85%, to $276.61 after the company announced positive results from a late-stage test of its Alzheimer’s drug candidate.

Biogen’s announcement has also given a boost to other drug companies pursuing their own Alzheimer’s treatments. Eli Lilly (LLY) shares were up $23.06, or 7.41%, at $334.16. Stocks rally after UK introduces bond bailout plan

Fry Electronics Team

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