Market Snapshot: Dow adds over 1,000 points as stocks recover some ground after biggest one-day drop since 1987 crash

U.S. stocks rebounded Tuesday, helped by the White House backing an $850 billion federal stimulus plan and a Federal Reserve move to backstop the commercial paper market by providing short term funding to businesses hit by the coronavirus pandemic.

The recovery came a day after the Dow Jones Industrial Average suffered its worst one day fall since the 1987 market crash as governments in the U.S. and Europe shut down significant amounts of economic activity in an attempt to slow the pandemic that originated in China in January.

How did stocks perform?

The Dow

DJIA, +5.20%

  closed 1,048.79 points, 5.2%, higher, at 21,237.31, after briefly dipping below the key 20,000 threshold mid-morning. while the S&P 500 index

SPX, +6.00%

added 143.06 points, 6%, to close at 2,529.19. The Nasdaq Composite Index

COMP, +6.23%

 closed up 430.19 points or 6.2%, at 7,334.78.

The Dow is off 28% from its Feb 12 record closing high, while the S&P 500 and Nasdaq are off by about 25% and 26%, respectively, from their Feb. 19 peaks.

What drove the market?

Stocks pushed higher midday after a White House briefing that outlined some steps the government was considering to mitigate the effects of the coronavirus epidemic, including allowing the deferral of tax payments, sending stimulus checks to Americans, and keeping financial markets open despite the recent volatility.

Investor anxieties about the coronavirus outbreak had deepened even after the Federal Reserve’s emergency Sunday interest-rate cut, which did little to spark buying on Wall Street. On Monday President Donald Trump warned of a possible recession due to the pandemic and the possibility that the viral outbreak could last deep into the summer.

The mostly downtrodden mood on Wall Street has been attributed to investors’ unfulfilled desire for more relief for individuals and small businesses and even some major cooperations that have been pummeled by the epidemic.

See: Washington works on coronavirus stimulus, with Trump administration calling for $850 billion package

The Republican-led U.S. Senate appeared on track to pass a bipartisan coronavirus bill around the middle of this week, after the Democratic-controlled House voted overwhelmingly for the legislation on Saturday and President Trump threw his support behind it. Senate Leader Mitch McConnell on Tuesday said legislators would immediately begin work on a second bill.

Those reported efforts come as governments and central banks around the world attempt to curtail the negative effects from travel disruptions and business closures seen as strategies to mitigate the spread of the deadly disease.

“Who knows about the next couple of days,” said David Rosenberg, chief economist and strategist of Rosenberg Research. “We’ve come off six days where the market has been up or down at least 4%. Could we bounce back on some short-covering rally? Sure. The one thing that is going to be with us is volatility and interest rates pressing against the floor. The markets basically are broken.”

In an interview with MarketWatch, Rosenberg, a noted “uber-bear,” said he thinks we’re likely two-thirds of the way through the bear market. “The end point is likely no higher than 2,250 on the S&P 500,” he said.

At least 4,281 cases have been confirmed in the U.S. along with more than 70 deaths, according to data from Johns Hopkins University.

Read: Here are the industries that could get coronavirus aid from the U.S. government

On Tuesday, the government said retail sales slipped 0.5% in February, missing the median forecast among economists surveyed by MarketWatch for a 0.1% monthly increase. But a separate report found that industrial production rose 0.6% in February, beating the MarketWatch consensus.

A measure of residential construction sentiment ticked down but stayed relatively upbeat in March, and a reading of job openings was higher in January, but are expected to decline.

Also on Tuesday, the Federal Reserve acted to backstop a source of short-term funding for big businesses, offering credit for the next 12 months.

Which companies were in focus?

Amazon

AMZN, +7.03%

 shares jumped after an analyst at Bank of America noted the e-commerce giant will benefit from the global move to keep people working from home or shopping online to limit the spread of the coronavirus.

After a few brutal weeks, airline shares slid further Tuesday. United Airlines Holdings Inc.

UAL, -13.53%

shares were down nearly 14%, while American Airlines Group Inc.

AAL, -2.14%

saw its stock dip 2.1%. Delta Air Lines Inc.

DAL, -11.37%

shares fell more than 11%.

Shares of Boston Beer Co. Inc.

SAM, +13.56%

  skyrocketed after an analyst upgrade. MKM Partners noted that beer sales do “remarkably well” during economic downturns.

Dunkin’ Brands Group Inc.

DNKN, -6.69%

shares slid nearly 7% Tuesday morning after the company said it would limit service to drive-through, carryout and delivery as a result of the COVID-19 outbreak.

Shares of Lands’ End Inc.

LE, +60.22%

 were 60% higher Tuesday after the retailer said revenue rose above expectations.

Walmart Inc.

WMT, +11.71%

shares jumped after Oppenheimer analysts upgraded the retailer, saying “grocers have clearly benefited from consumer stock-up activities.”

United Rentals, Inc.

URI, -2.16%

shares slipped after a price target cut.

Related: Stocks will face ‘long road’ back to the highs when bear market bottoms, says analyst who called 2018 swoon

How did other markets trade?

The yield on the benchmark 10-year Treasury note

TMUBMUSD10Y, +45.93%

 shot up 34 basis points to 1.06%, after notching its largest single-day yield decline since March 18, 2009, according to Dow Jones Market Data.

West Texas Intermediate crude, the U.S. gauge of oil prices

CLK20, -6.00%

 fell 6.1% to $26.95 a barrel on the New York Mercantile Exchange, matching its Monday close as the lowest since February 2016. May Brent crude

BRN.1, -0.35%

 , the global benchmark, lost $1.32, or 4.4%, at $28.73 a barrel on ICE Futures Europe, marking the lowest settlement since January 2016.

Gold futures for April

GCJ20, +2.85%

were up 3% to $1,533.50 an ounce on Comex.

In currencies, the ICE U.S. dollar index

DXY, +1.47%

which tracks the greenback’s performance against a basket of its major rivals, was up 1.6% after falling 0.6% on Monday.

Global equities tumbled on Monday. China’s CSI 300

000300, -0.49%

closed 0.4% lower, while Japan’s Nikkei index

NIK, +0.06%

advance less than 0.1%. The Stoxx Europe 600 index

SXXP, +2.26%

closed 2.3% higher after falling nearly 5% a day ago.

See: Here’s what to buy in a ‘completely absurd’ market, according to this longtime strategist

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