MANHATTAN (CN) — U.S. markets opened to modest gains Tuesday, with investors hoping to make back some of the massive losses from the previous day as the world continues to grapple with coronavirus.
The Dow Jones Industrial Average opened to a 1.8% increase in the opening minutes, while the S&P 500 and Nasdaq had slightly better gains. Those gains quickly reversed, however, as the Dow and Nasdaq both dipped slightly into losses by 10 a.m., while the S&P lost most of its momentum and hovered around a 0.5% increase.
The gains are likely short-lived in what has become an extremely volatile market that has investors taking one step forward for every three steps back.
Before the market opened, futures rose leapt up and back down — at one point hitting their “limit-up” 5% circuit breakers — but by the time of the opening bell they settled to increases of just over a point.
Asian stocks also saw a minor bump early Tuesday, with most markets finishing less than a point up. In Europe, markets continued their downward trajectory, with the Stoxx 600 dropping roughly 1.6%.
Investors now await further news from federal authorities, who are scrambling to contend with both the growing health concerns of the novel coronavirus and the economic wreckage that it promises.
Of an $850 billion stimulus package currently under way in Washington, $50 billion would be set aside to help the ailing airline industry. A vote in the Senate is not expected until later in the week.
In the meantime, leading financial institutions are expected to tap the Federal Reserve’s discount window for lending, according to The New York Times. Banks rarely use the window, designed to keep money flowing, and even shied away from it during the 2008 recession.
Leading the rush to the discount window is Morgan Stanley, which Tuesday morning warned investors that “global recession in 2020 is now our base case” and that global growth was expected to slow to less than a point this year.
In the wake of the economic slowdown, markets have been punctuated by several benchmarks over the last week.
On March 9, U.S. stock markets saw their sharpest drop since the 2008 financial crisis, falling 7% in early morning trading that day before a circuit breaker temporarily halted trading.
March 12 saw the third worst percentage drop in the Dow, though the following day the Dow posted its largest point gain in history following the president declaring a national emergency, settling at 23,185 points.
This week also started off on a bad note, overtaking last week’s record as the worst since 1987’s Black Monday. The Dow dropped 13% to 20,188 points, with similar drops by the S&P 500 and Nasdaq.
COVID-19, the new strain of coronavirus responsible for a global pandemic, has now affected well over 183,000 worldwide and more than 4,200 confirmed in the United States, according to data compiled by Johns Hopkins University.
An estimated 7,100 — at least 70 of whom are in the United States — have died globally from the virus, data show.
But some officials claim the numbers are likely higher. A leading health official in Ohio estimates at least 100,000 people in the state already have coronavirus, while one estimate from the Centers for Disease Control and Prevention estimates 160 million Americans could end up infected over the course of the epidemic.
Over the weekend the CDC recommended limiting social gatherings to no more than 50 people. That advice was quickly eclipsed by the president’s own, to limit groups to no more than 10 people.
Several states, including New York, California and Ohio, have either mandated or recommended that bars and restaurants close or stay open only to provide take-out and delivery service.
New Jersey has instituted a recommended curfew, with other states possibly following suit.
The disease has spread far and wide, and it has now impacted the young as well as terrified the old. A 5-year-old in New Jersey was found to have contracted coronavirus, while a newborn in England also tested positive.
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