New York (AFP)

The New York Stock Exchange ended in the green Monday, erasing its losses from the start of the session after the announcement by the Federal Reserve (Fed) that it would buy corporate bond debt.

Its flagship index, the Dow Jones Industrial Average rose 0.62% to 25,763.16 points.

The highly technological Nasdaq gained 1.43% to 9,726.02 points.

The S&P 500, which represents the 500 largest companies on Wall Street, rose 0.83% to 3,066.59 points.

"That the Fed says it will buy a large and diversified portfolio of securities indicates that it intends to touch all areas" of the economy, explains Gregori Volokhine of Meeschaert Financial Services.

"It is not going to consist of buying back only the debt with the best ratings," he said.

The American Central Bank is already buying bond securities of index funds (ETFs), which are evolving passively.

But with this new measure, it will be able to buy, from Tuesday, corporate bonds on the secondary market, which aims to help groups in lack of liquidity due to the economic impact of the coronavirus.

"Buying bonds individually will allow the Fed to channel its power and strike force much better," said Volokhine.

"Portions of the otherwise neglected economy will be privileged," he said.

Earlier today, the US Central Bank also launched its loan program for medium-sized businesses, which is supposed to complement the federal government's aid package to fight the impact of the Covid-19 pandemic.

This "Main Street Lending Program" makes it possible to lend money to companies that are too large to be able to benefit from the loans put in place by the Trump administration and Congress as part of the plan to revive the American economy.

Before this series of announcements, the New York indices were moving in the red, continuing on the same trend as last week, in a market increasingly worried about a second wave of Covid-19 and its consequences for the American and global economy.

On the bond market, the 10-year rate on the American debt was rising, standing at 0.7133% around 20.25 GMT against 0.7034% Friday evening.

© 2020 AFP