Markets mixed as Fed expands credit support

Markets were mixed on Monday.

Early in the day, the Nikkei 225 plunged 3.5 percent while later the STOXX Europe 600 slipped 0.3 percent.

However, the S&P 500 rose 1.3 percent after the Federal Reserve said it is expanding the scope of its $750 billion emergency corporate debt loan facility to include individual corporate bonds, while also scrapping some earlier restrictions for potential borrowers.

“This change underscores the Federal Reserve’s commitment to supporting the flow of credit to large corporations,” said Steve Friedman, senior macroeconomist at MacKay Shields.

Some analysts brushed off reports of rising COVID-19 cases in the US.

“Cases are up, but that’s a result of more testing,” said Kent Engelke, chief economic strategist at Capitol Securities Management. ”You just can’t just close down the economy again,” he added.