Chaos on Wall Street as Dow plunges before closing up 180 points in rally on hopes of coronavirus stimulus deal

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Stocks rallied after early losses on Wall Street on Thursday, as the coronavirus pandemic unfolds and a major bank warns the recession has already begun. 

The Dow Jones Industrials gained almost 200 points, or 1 percent. Investors were cautiously optimistic after seeing more steps by the Federal Reserve and other central banks as well as governments to support credit markets and the economy. 

It was a brief respite in the meltdown in global markets, reminiscent of the 2008 financial crisis, which has pushed Wall Street's three main indexes down about 30 percent from their record closing highs last month.

The pandemic crash has now erased the Dow Jones Industrial Average's gains since the President Donald Trump 's 2017 inauguration, wiping out a major  accomplishment touted by his his re-election campaign. 

Friday will mark the last session of live trading on the floor of the New York Stock Exchange, with trades moving to an all-electronic system on Monday after several traders tested positive for coronavirus in preemptive screening tests. 

Traders work on the floor at the opening bell at the New York Stock Exchange on Wednesday

In a note to clients, Bank of America's chief U.S. economist warned that the recession has already begun.

The note said the U.S. economy is in a 'deep plunge' brought on by the global coronavirus pandemic.

'We are officially declaring that the economy has fallen into a recession ... joining the rest of the world, and it is a deep plunge,' Michelle Meyer wrote. 'Jobs will be lost, wealth will be destroyed and confidence depressed.'

The great unknown remains how long containment measures will be needed. The longer they last, the deeper the economic damage will be.

Former Trump administration economist Kevin Hassett told CNN on Thursday that if everyone stays home for six months, 'it is like a Great Depression.'

Hassett said the April jobs report will be 'the worst jobs number you ever saw.'

The floor of the New York Stock Exchange was sparsely populated on Thursday. The physical exchange will close starting on Monday with all trades conducted electronically

A surgical mask is placed on The "Fearless Girl" statue outside the New York Stock Exchange on Thursday in New York. Stocks are swinging between gains and losses in early trading

Christina Pae takes a picture of the "Fearless Girl" statue with a surgical mask placed on it

The Trump administration is pushing for a package of some $1.3 trillion in aid to help businesses and individual Americans devastated by the virus, but markets fear that the economic damage of the pandemic will still be ruinous.

Across the country, states and cities have ordered restaurants and bars to close, affecting millions of workers. Other businesses that rely on foot traffic have shuttered as Americans stay indoors and reduce spending to the essentials.

The number of Americans filing for unemployment benefits surged to a 30-month high last week, suggesting a pickup in layoffs as the coronavirus pandemic fractures economic activity.

Initial claims for state unemployment benefits jumped 70,000 to a seasonally adjusted 281,000 for the week ended March 14, the highest level since September 2017, the Labor Department said on Thursday. Data for the prior week was unrevised. 

Economists polled by Reuters had forecast claims would increase to 220,000 in the latest week. The Labor Department attributed the jump in claims to COVID-19, the respiratory illness caused by the coronavirus.

'A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not,' it said.

Last week's numbers only captured the beginning of the crisis, before many of the shutdown orders went into effect. 

Federal Reserve sets up $450 billion currency swap with nine other central banks to prevent shortage of US dollars around the world

The Federal Reserve has set up a program to exchange U.S. dollars for foreign currency with nine central banks to support dollar lending in global markets that are under pressure from the impact of the viral outbreak.

The move, announced Thursday, enables foreign banks to provide dollars to their banks that sometimes lend and trade in US currency.

It is the latest effort by the Fed to smooth the functioning of financial markets, as investors, banks, and companies rush to stockpile cash amid plunging stock markets and a sharply slowing economy. Late Wednesday, the Fed also reactivated its third lending facility dating from the financial crisis intended to provide more cash to banks in the form of short-term loans.

The currency swaps established Thursday are capped at $60 billion for six central banks in Australia, Brazil, Mexico, Singapore, Korea and Sweden. The exchange lines are capped at $30 billion for central banks in Denmark, Norway and New Zealand. Under the swaps, the Fed provides dollars for an equal amount of foreign currency, which it can also use in short-term lending to banks if needed.

Almost no pedestrians or commuters are walking near the New York Stock Exchange before the opening bell on Wall Street in New York City on Monday

The Fed already maintains such currency exchanges with five other central banks, including the European Central Bank, the Bank of Japan, and the Bank of Canada.

Late Wednesday, the Fed announced its third emergency lending program to provide money to banks that purchase financial assets from money market mutual funds, including short-term IOUs known as commercial paper.

By facilitating the purchase of commercial paper, which is issued by large businesses and banks, the Fed hopes to spur more lending to firms that are seeking to raise cash as their revenues plummet amid the spread of the coronavirus.

This facility, known as the Money Market Mutual Fund Liquidity Facility, is intended to help money market funds unload assets such as commercial paper, but also Treasury securities and bonds guaranteed by mortgage giants Fannie Mae and Freddie Mac.

Money market mutual funds are owned by individual investors in brokerage accounts but also by institutional investors and businesses. Many of the funds have sought in the past two weeks to sell assets to raise cash as investors redeem shares in the funds. Yet with demand for cash rising money market funds have struggled to find buyers for their assets. 

'Italian model' for stimulus: Rents are reduced, layoffs banned, and cash help for workers and families 

As the Trump administration pushes a $1.3 trillion stimulus package that will likely be heavy on corporate bailouts, Italy is pursuing a different model of economic recovery.

Ravaged by the pandemic, Italy has suffered more than 35,000 cases and 2,900 deaths, prompting a national lockdown that is decimating the country's economy.  

Under Italy's economic survival plan, companies are barred from laying off workers, and rents are being reduced

Prime Minister Giuseppe Conte hailed his $28 billion program as the 'Italian model' that the rest of Europe could adopt as it imposes its own painful lockdowns. 

Other European nations are now taking on Italy's painful social distancing measures -- and Conte believes they will also adopt his remedy for families and businesses hurt by the fight against the invisible killer disease.

Italian police perform checks on locals found out on the streets, in front of Trinita dei Monti at Piazza di Spagna in Rome on Thursday

'When we talk about the Italian model, we are not only talking about health but also the economic response to the crisis,' Conte said while unveiling his 'Cura Italia' ('Italian Cure') plan at the start of the week.

Other European countries will probably never take on all 127 of the points that Conte -- a former law professor -- and his team of technocratic ministers drafted in the heat of Italy's gravest emergency since World War II.

But here are the broad outlines of what Conte thinks could be a pan-European response plan. 

Companies are prohibited from laying off workers for the next two months without 'justified objective reasons'.

The self-employed and seasonal workers such as tour guides can expect a 600-euro ($680) payment for the month of March to help cushion the pain of lost business.

The government will also cover 100-euro bonuses for low-wage employees. 

Families are issued 600-euro vouchers to cover the expense of having to hire baby sitters to look after their children, who will be out of school at least until April 3.

A medical worker wearing a protective mask and suit and a patient suffering from coronavirus are seen in an intensive care unit at the Oglio Po hospital in Cremona, Italy on Thursday

The Italian government said Wednesday that its month-long shutdown of everything from kindergartens to private universities might run well into next month.

The self-employed who have to look after their kids will receive 'parental leave' payments that cover half of their declared monthly incomes.

These payments can also be calculated on a daily basis. 

Conte has shut down all forms of business except for pharmacies and grocery stores for two weeks starting on March 12.

The government is compensating shop owners by offering them tax credits to cover 60 percent of their March rent payment.

The self-employed and freelancers with home mortgages can ask to have their payments suspended for up to 18 months if they can prove that their incomes fell by a third. 

A variety of taxes and social service payments are being suspended for sectors and professions deemed most affected by the crisis.

An existing list has been expanded to include everyone from truck drivers and hotel staff to cooks and clerks.

The government expects to start collecting the taxes again in May. 

$1 TRILLION IN VIRUS BAILOUT REQUESTS AND COUNTING

As the coronavirus outbreak threatens to bring U.S. economic activity to a grinding halt, American businesses are jockeying for a financial lifeline from the administration of President Donald Trump.

The below have asked Washington, D.C., or state lawmakers for aid to offset the economic fallout of the coronavirus.

SHATTERED RESTAURANTS: 8 MILLION JOB LOSSES, $455 BILLION REQUEST 

Destroyed: The restaurant industry says shuttered outlets like this Portland cafe means losing half its 15.6 million jobs

A U.S. restaurant trade group on Wednesday asked the White House and Congressional leaders for a $455 billion aid package, saying that the industry could shed nearly half of its 15.6 million jobs and at least a quarter of its annual sales because of the coronavirus outbreak.

The group, the Washington, D.C.-based National Restaurant Association, said restaurants could take a $225 billion sales hit in the next three months, a quarter of their projected total sales of $899 billion.

TRAVEL AND HOTEL INDUSTRY: WE NEED $250 BILLION TO DEAL WITH CRISIS 

American hotel and travel industry executives met with Trump on Tuesday to discuss a potential $250 billion aid package, as thousands of hotel workers began furloughs due to the fast-spreading coronavirus.

The requested package would consist of $150 billion in direct aid for the hotel sector and $100 billion for related travel companies, including convention businesses, industry executives said on a call after the meeting with Trump, who made his fortune in real estate and hotels.

TOWN AND CITIES NEED $250 BILLION IN AID TO DEAL WITH CRISIS 

The U.S. Conference of Mayors has asked Congress for $250 billion in localized aid to help cities stop the spread of the coronavirus, including through resources for public health departments, supporting small businesses and addressing food insecurity, according to a statement on their website.

In peril: The giant manufacturer says it needs the government to guarantee liquidity

BIGGEST SINGLE CORPORATE REQUEST: BOEING SAYS $60 BILLION TO STAY AFLOAT

Boeing Co on Tuesday called for a $60 billion bailout in access to public and private liquidity, including loan guarantees, for the struggling U.S. aerospace manufacturing industry, which faces huge losses from the coronavirus pandemic.

The U.S. planemaker has told lawmakers it needs significant government support to meet liquidity needs and it cannot raise that in current market conditions, people briefed on the matter said.

WE NEED $50 BILLION NOW: AIRLINE INDUSTRY 'NEEDS GRANTS AND LOANS' 

Major U.S. airlines sought a government bailout of more than $50 billion in the wake of the steep falloff in U.S. travel demand sparked by the coronavirus outbreak.

Airlines for America, the trade group representing American Airlines, United Airlines Inc, Delta Air Lines Inc, Southwest Airlines Co and others, said the industry needs $25 billion in grants, $25 billion in loans and significant tax relief to survive. 

They also seek tax relief that could be worth tens of billions of dollars through the end of at least 2021.

They also seek a package of $8 billion, equally divided in grants and loans for cargo carriers.

OUR 460 CASINOS NEED $18 BILLION SAY NATIVE AMERICAN TRIBES

Closed: The Akwesasne Mohawk Casino operated by the St. Regis Mohawk Tribe in Hogansburg, New York is one of 460 which tribes say need bailed out

The Native American gaming industry on Tuesday requested $18 billion in U.S. federal aid as it shut casinos that are the sole source of commercial revenue for dozens of tribes in a bid to slow the coronavirus epidemic.

Tribal governments will be unable to provide health and education services and will default on loans unless they get federal support to make up for lost casino money, the National Indian Gaming Association said in a letter to members of the U.S. House of Representatives.

The United States' roughly 460 Indian casinos are in the process of closing given the threat of coronavirus to tribal members and many non-Native American employees.

EMPTY AIRPORTS WANT $10 BILLION TO DEAL WITH COLLAPSE IN TRAFFIC

U.S. airports are seeking $10 billion in U.S. government assistance to help offset losses incurred by the sharp drop in travel due to coronavirus, two people briefed on the matter said.

WE NEED $1 BILLION TO KEEP THE TRAINS RUNNING WARNS AMTRAK

Off the rails: Amtrak says the passenger railroad needs $1 billion make up for collapsing bookings

U.S. railroad Amtrak said on Monday that the passenger rail service and its state partners need $1 billion in government assistance after a dramatic decline in travel because of the coronavirus outbreak. Amtrak said bookings had plunged 50% since the outbreak.

EVEN THE WHISKEY INDUSTRY IS ASKING FOR AID

The Tennessee Distillers Guild on Tuesday asked the state's governor and legislature for relief to offset the blow from suspending tours, cancelling large events and ceasing production due to the coronavirus, the guild said in a statement on their website.

The guild asked for immediate temporary relief for distilling, brewing and hospitality industries from payroll, gallonage and liquor by the drink taxes, though it did not specify how much aid it sought.