Dow rebounds more than 400 points a day after coronavirus fears spark worst drop since 1987
- US stocks staged a modest rebound on Tuesday after the Dow Jones Industrial Average plunged the most since 1987 the prior day. That marked its second-worst single-day decline in history.
- All three major US indices climbed more than 2% as investors inched back to risk assets amid strong volatility.
- The Federal Reserve Bank of New York continued adding capital to money markets, injecting an additional $500 billion Monday afternoon alongside its $5 trillion liquidity injection plan.
- Watch all major indices update live here.
US stocks rose Tuesday morning, posting a minor recovery following the Dow Jones Industrial Average's biggest single-day drop since 1987 - its second-worst plunge in history.
All three major US indices gained more than 2% as investors crawled back to risk assets. Monday's drop brought the intense, coronavirus-driven selling activity into its fourth calendar week and wiped out all gains made in 2019, one of the last bull market's best annual performances.
Here's where major US indexes stood as of the market open on Tuesday:
- S&P 500: 2,444.52, up 2.5%
- Dow Jones Industrial Average: 20,603.87, up 2.1% (415 points)
- Nasdaq composite: 7,069.21, up 2.4%
Overnight trading of futures contracts tied to the three indices hit their so-called upside limit as traders bet on a sharp recovery in Tuesday's session. The S&P 500 has always rebounded by at least 2% on Tuesdays that follow a 5% decline to start the week, according to Bloomberg.
The climb arrives after the Federal Reserve continued utilizing its arsenal of stimulus measures to buttress the economy from a coronavirus-sourced downturn. The Federal Reserve Bank of New York stepped in on Monday to add $500 billion to money markets, further boosting liquidity after unveiling a $5 trillion capital injection scheme last week.
The central bank also slashed its benchmark interest rate close to zero on Sunday for the first time since the financial crisis.
The stock market's heightened volatility hasn't abated after weeks of intense price swings. The VIX index - regarded as Wall Street's preferred gauge of investor fear - surged to highs not seen since the financial crisis on Monday as the coronavirus sell-off intensified.
Airline stocks looked to recover from a dismal day of trading on Monday. Airlines for America, which represents the largest US passenger and cargo airlines, asked for a combined $54 billion in loans from the government to pad the outbreak's impact and boost the firms' balance sheets.
President Trump hinted such aid would be delivered in a Monday evening tweet.
"The United States will be powerfully supporting those industries like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!" he wrote.
Regeneron served as one of Tuesday's biggest winners, jumping as much as 12% in early trading after announcing plans to introduce a potential COVID-19 treatment to human trials by early summer. The news marked an acceleration in the company's drug pipeline.
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