NEW YORK (AP) — Stocks are opening broadly higher on Wall Street Tuesday, a day after plunging to their worst loss in more than three decades. The Dow industrials added 150 points, or 0.7%, a day after dropping nearly 3,000. Markets are continuing to whipsaw because of uncertainty over how badly the coronavirus will hit the economy. European markets are lower and Asian markets ended mixed after a bumpy day. Several economists say the global recession has already begun as large swaths of the economy shut down due to the virus. The Trump administration is proposing an $850 billion stimulus plan to help the economy, sources told The Associated Press.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:
Global stock markets were volatile Tuesday after a brutal sell-off that gave the U.S. stock market its worst loss in over 30 years, with many economies grinding to a standstill in hopes of containing the spread of the coronavirus.
Major indexes in Europe lost early gains after Asian markets largely logged solid increases. U.S. futures wobbled between gains and losses as investors sought to gauge how vast and deep the economic damage will be and how swift governments will ramp up rescue measures.
“Details as yet are sparse. Investors are pinning their hopes on governments flooding people and businesses with enough cash to survive months of a coronavirus-induced lockdown,” analyst Jasper Lawler of trading platform LCG said.
A measure of market volatility was at a record high at the end of Monday, suggesting the wild swings could continue while it is unclear how long the outbreak will last.
The CAC 40 in Paris was down 0.8% to 3,852, after being up more than 3% earlier, when the government announced $50 billion in aid for individuals and businesses. Germany’s DAX shed 1% to 8,650 and Britain’s FTSE 100 fell back 1% as well, to 5,100.
Futures for the S&P 500 climbed 2.5% while the future for the Dow Jones Industrial Average added 2.6%.
Earlier, Asia largely closed higher. Australia’s benchmark jumped 5.8% after a 7% plunge on Monday as investors snapped up miners and banks. Tokyo’s Nikkei 225 climbed 0.8% at one point but barely eked out a gain, adding less than 10 points to 17,011.53.
The rise in U.S. futures comes after the Trump administration said it plans strong support for airlines stricken by the outbreak and is pushing the Senate to enact a massive stimulus package to alleviate losses for businesses and individuals affected by the outbreak, which has infected more than 182,000 people worldwide, 4,661 in the United States.
The Nikkei 225 in Tokyo rose to 17,011.53, while Hong Kong’s benchmark jumped 0.9% to 23,263.73. Sydney’s S&P/ASX 200 jumped to 5,293.40, while the Shanghai Composite index sank 0.3% to 2,779.64. The Sensex in Mumbai rose 0.2% to 31,434.96. The Kospi in South Korea dropped 2.5% to 1,672.44. Shares also fell in Southeast Asia.
The Philippine stock market was closed as of Tuesday after the government imposed restrictions on movement in the capital.
Oil prices also rose Tuesday, with U.S. benchmark crude up 2.5%, or 74 cents, to $29.44 per barrel in electronic trading on the New York Mercantile Exchange. It plunged $3.03 to $28.70 on Monday. Brent crude, the international standard, picked up 0.5%, or 19 cents, to $30.24 per barrel.
Analysts said bargain hunters appeared to be buying crude to help fill government oil reserves, anticipating China’s economy will get a boost from massive stimulus yet to be announced.
Recent losses in global markets have been the worst since the 2008 financial crisis.
Monday’s 12% drop for the S&P 500, its worst day in more than three decades, came as voices from Wall Street to the White House said the coronavirus may be dragging the economy into a recession.
The S&P 500 has shed nearly 30% since setting a record less than a month ago, and it’s at its lowest point since the end of 2018. Monday’s precipitous losses accelerated in the last half hour of trading after President Donald Trump said the economy may be headed for a recession and asked Americans to avoid gatherings of more than 10 people.
The plunge came even though the Federal Reserve rushed to announce a new round of emergency actions before markets opened for trading on Monday. The moves are aimed at propping up the economy and getting financial markets running smoothly again, but they may have raised fears even further. Investors are also waiting for the White House and Congress to offer more aid to an economy that’s increasingly shutting down by the hour.
The Dow Jones Industrial Average plunged 2,997 points, or 12.9%.
Declines last week ended the longest-ever bull market on Wall Street, nearly 11 years following the financial crisis. There’s seemingly no escape from the uncertainty: From parked airplanes to empty restaurants, nobody knows when economies might revive or even when countries will be able to get the spread of the virus under control.
Closing businesses can help slow the spread of the virus, but it also takes cash out of the pockets of companies and workers.
The best-case scenario for many investors is that the economic shock will be steep but short, with growth recovering later this year after businesses reopen. Pessimists are preparing for a longer haul.
For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough, and those with mild illness recover in about two weeks. But severe illness including pneumonia can occur, especially in the elderly and people with existing health problems, and recovery could take six weeks in such cases.
The Federal Reserve has been trying to do what it can to help the economy, and over the weekend it slashed short-term interest rates back to their record low of nearly zero.
It also said it also will buy at least $500 billion of Treasury securities and $200 billion of mortgage-backed securities to help calm the Treasury market, which is a bedrock for the world’s financial system and influences stock and bond prices around the world. Trading in the market was starting to snarl last week, with traders spotting disconcertingly large gaps in prices offered by buyers and sellers.
The yield on the 10-year Treasury rose to 0.81% from 0.73% late Monday.
In currency trading, the dollar rose to 107.08 Japanese yen from 105.90 yen. The euro weakened to $1.1011 from $1.1184.
Alice Fung and Nadia Lam in Hong Kong contributed.
The Associated Press receives support for health and science coverage from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.
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