Stocks rebounded strongly on Tuesday from historic losses a day earlier, as markets continued wild swings from the impact of the coronavirus and an oil price war between Russia and Saudi Arabia.
The Dow Jones Industrial Average gained more than 1,100 points, reclaiming more than half of its losses from Monday to close at 25,018. The index rose 4.89% on the day after its worst trading day in 12 years.
The S&P 500 gained 4.94%, while the tech-heavy Nasdaq rose 4.95%. Both of those indexes had lost more than 7% Monday.
The trading day saw big swings, with each of the indexes rising more than 2.5% after the opening bell, then giving away all those gains by noon, only to climb rapidly again before the close. The afternoon rally followed an announcement by Vice President Mike Pence that health insurers had agreed to cover co-pay costs for coronavirus testing.
Investors also were eyeing a proposal by President Trump for a series of legislative and executive actions to protect the economy and blunt the spread of the coronavirus outbreak. He called for a temporary payroll tax cut, expanded sick leave for workers affected by the virus, and aid for small businesses and industries such as airlines and cruise ships.
After the meeting with the insurers, Mr. Trump said the government is working with the cruise line industry, which has been hammered by the virus. That helped lift the market.
Monday’s 7.6% plunge for U.S. stocks was the sharpest since 2008, when global authorities banded together to rescue the economy from the financial crisis.
On Tuesday, the S&P 500 shuffled along with modest gains until soaring higher in the last two hours of trading after Mr. Trump made his pitch for economic aid on Capitol Hill. Treasury Secretary Steven T. Mnuchin also met with House Speaker Nancy Pelosi, whose support would be needed for any deal in a deeply divided Congress.
Mr. Mnuchin also convened a call with officials of the Federal Reserve and Securities and Exchange Commission to discuss market and economic conditions, the Treasury Department said.
In addition to Mr. Mnuchin, Fed Chairman Jerome H. Powell, Vice Chair Randal Quarles, New York Fed President John Williams and SEC Chairman Jay Clayton participated in the call.
“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.”
U.S. crude oil prices climbed 10.4% on Tuesday to $34.36 per barrel. On Monday, prices had dropped more than 30% in the worst fall since 1999 as major oil producers Saudi Arabia and Russia started a price war, pumping more oil even though demand is falling because of the virus.
The day’s market moves were a microcosm of the major swings that have dominated recent weeks, and market watchers say they’re likely to continue until the number of infections stops accelerating.
⦁ This article is based in part on wire service reports.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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