Stocks closed sharply higher on Wall Street on Tuesday, with all three major indexes rising 4.9%.
Wall Street endured another day of dizzying trading Tuesday, whipping up and down with hopes that the U.S. and other governments will cushion the economy from the pain of the coronavirus.
The Dow Jones industrial average rose 1,163 points, to 25,014. The S&P 500 increased 135 points, to 2,881, and the Nasdaq advanced 393 points, to 8,344.
The gains recovered about half of the market’s historic losses from the day before and came after another wild day of whipsaw trading.
The Dow opened the day with a 900-point-plus gain only to see it evaporate into a 160-point loss later in the morning. The market then rebounded throughout the afternoon.
With markets on edge, signs had started to mount that governments around the world are awaking to need for stimulus measures to combat the virus that is threatening to plunge the global economy into recession.
Investors saw glimmers of such a coordinated response, which led to Tuesday’s optimism.
At a White House press briefing Monday night, Trump said his administration would be asking Congress to pass payroll tax relief and other quick measures aimed at easing the impact of the coronavirus on workers.
But as markets waited on Tuesday for details about Trump’s plan, prices oscillated sharply.
After a meeting with major health insurers, Trump said the government is working with the cruise line industry, one of the hardest hit by the virus. That helped lift the market, which had earlier flipped to losses amid doubts that the government would announce anything soon.
The S&P 500 shuffled along with modest gains until rocketing higher in the last two hours of trading. That’s when Trump made his pitch for economic aid on Capitol Hill. Treasury Secretary Steven Mnuchin also met with House Speaker Nancy Pelosi, whose support would be needed for any deal in a deeply divided Congress. Mnuchin called the meeting productive.
“I would expect the authorities to pull out all the stops to reduce uncertainty,” said Alec Young, managing director of global markets research at FTSE Russell. “This may be their one opportunity to do that.”
Perhaps the most notable move in markets Tuesday was that Treasury yields pushed higher. The bond market rang warning bells about the virus long before the stock market, and a rise in yields is a sign that fear has receded a bit.
The 10-year Treasury yield rose to 0.79% from 0.49% late Monday. A week ago, it had never been below 1%.
The rebound pulled the stock market a bit further from the edge of a bear market, signified by a drop of 20% from a record. The S&P 500 is down 14.9% from its high. If it can rally back to that point, it would extend the longest-ever bull market, which began its climb after the market hit bottom on March 9, 2009.