The Dow surges 780 points on COVID-19 recovery efforts as oil prices spike
- US stocks gained on Wednesday as investors cheered a slowdown in new US coronavirus cases and the White House's early plans for economic recovery.
- The gains came after Tuesday's wild reversal that saw all three major US indexes erase sharp early gains and close lower.
- The Trump administration said on Tuesday that it planned to reopen economies in smaller cities and towns less harmed by the outbreak before allowing larger, heavily hit cities to resume activity.
- Oil surged as much as 12% amid mounting expectations that an upcoming OPEC+ meeting will lead to production cuts.
- Watch major indexes update live here.
US stocks gained on Wednesday as traders mulled Tuesday's market whipsaw and President Donald Trump's plans for economic recovery.
Investors continued to buy risk assets amid hopes of coronavirus cases slowing throughout the US. The number of daily new reported cases has fallen since Friday's highs, according to data collected by Johns Hopkins University.
The White House said on Tuesday that it planned to first reboot the nation's economy in smaller cities and towns less affected by the outbreak before reopening larger, heavily hit cities. The plan is still being developed but gave investors the first signs of how the crippling economic shutdown could end.
Here's where major US indexes stood at the 4 p.m. ET market close on Wednesday:
- S&P 500: 2,749.98, up 3.4%
- Dow Jones industrial average: 23,433.57, up 3.4% (780 points)
- Nasdaq composite: 8,090.90, up 2.6%
"The difference between now and the start of the pandemic is that we can at least see the end," Brad McMillan, chief investment officer at Commonwealth Financial Network, told Business Insider. "We can see that we have flattened the curve, and we can reasonably project when the pandemic will be brought under control. We are not at that point yet, but at least we can see it."
WTI crude oil spiked 12% at intraday highs as investors continued to monitor developments in a price-war truce. Production hikes and price cuts from Saudi Arabia and Russia have pushed oil's price near two-decade lows. A meeting of OPEC, Russia, and other producers may usher in the first major de-escalation in the global conflict.
The US on Tuesday slashed its oil-production forecast through 2021 to boost demand during the virus-driven supply glut. The Energy Information Administration said it sees the price of Brent crude averaging out to $33 per barrel through 2020 before rebounding to an average of $46 per barrel the following year.
The EIA also expects the US to become a net importer of oil by the third quarter of 2020 for the first time since 2019, returning to net-exporter status in 2021.
Minutes from the Federal Open Market Committee's emergency March 15 meeting published Wednesday revealed the central bank's view of the pandemic as it first began gripping the US. The Board saw either a short-lived outbreak giving way to recovery in the second half of 2020 or a prolonged pandemic placing the rebound in 2021.
The current economic downturn is "temporary," and the "healthy state of the US banking system" differentiates the coronavirus-induced slump from the 2008 financial crisis, the directors said in the mid-March session.
Wednesday's rebound came after Tuesday ended with mild losses after surging more than 3% early in the day. All three indexes jumped into a technical bull market on Tuesday morning before reversing gains. Stocks have moderately rebounded from late-March lows as fewer new virus cases and trillions of dollars in government stimulus eased concerns of economic collapse.
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