MANHATTAN (CN) — A government bailout predicted to top $1 trillion to contend with the effects of coronavirus helped urge somewhat of a market rebound Tuesday.
The Dow Jones Industrial Average closed at 21,237 points, dipping under 20,000 at one point. While the Dow saw about a 5% increase, the market is down roughly 5,000 points since the beginning of March. Meanwhile the S&P 500 and the Nasdaq each increased 6% by the closing bell.
The increases built upon modest gains in early morning trading and a volatile futures market Monday night, during which futures at one point hit their “limit-up” 5% circuit breakers.
Abroad, gains were far more meager than in the United States. Asian stocks had a minor bump, with most markets finishing less than a point up. In Europe, markets continued their downward trajectory, with the Stoxx 600 dropping roughly 1.6%.
Market gains from Tuesday are likely going to be short-lived as the rising number of COVID-19 cases is expected to bring a massive spike in unemployment and social isolation across the nation.
Trying again to calm investors, President Trump promised Tuesday that once the “invisible enemy” of coronavirus is dealt with, the U.S. economy will “pop back like nobody’s ever seen before.”
Treasury Secretary Steven Mnuchin has been working with senators to put together a stimulus package, which could be anywhere from $850 billion to $1 trillion.
Such a package would likely include paid sick leave and medical leave for affected workers. The package also would set aside $50 billion to help the ailing airline industry, as well as aid to Boeing and payments to small businesses.
Backed up by $10 billion from the Treasury, the Fed promised additionally to buy up commercial notes, which are used to help supply credit and funding for auto loans and mortgages.
Individuals and businesses will now be able to defer tax payments for up to 90 days. A payroll tax holiday — something the president has pushed for strongly — seems to be on the back burner, Mnuchin indicated, with immediate payments to workers more likely. Telehealth services will also expand in an effort to limit exposure to the virus.
“We want to go big, go solid,” Trump told reporters.
While U.S. markets leapt up 4% to 5% following the press conference, the past week has been punctuated by huge swings and benchmarks.
COVID-19, the new strain of coronavirus responsible for a global pandemic, has now affected well over 196,000 worldwide and more than 5,700 confirmed in the United States, according to data compiled by Johns Hopkins University.
An estimated 7,800 — at least 89 of whom are in the United States — have died globally from the virus, data show.