Stocks jump after virus measures, Biden rebound

Rally picks up steam on heels of $8.3B bill in Congress

The Dow Jones Industrial Average soared more than 1,100 points, or 4.5%, Wednesday on hopes that governments and central banks around the world will take more forceful measures to fight the virus outbreak.

The gains more than recouped the market’s big losses from a day earlier as Wall Street’s wild, virus-fueled swings extend into a third week.

Stocks rose sharply from the get-go, led by big gains for health care stocks after Joe Biden solidified his contender status for the Democratic presidential nomination. Investors see him as a more businessfriendly alternative to Bernie Sanders.

The rally’s momentum accelerated around midday after House and Senate leadership reached a deal on a bipartisan $8.3 billion bill to battle the coronavirus outbreak. The House passed it; the Senate votes Thursday. The funds would go toward research into a vaccine, improved tests and drugs to treat infected people.

Investors are also anticipating other central banks will follow up on the Federal Reserve’s surprise move Tuesday to slash interest rates by half a percentage point in hopes of protecting the economy from the economic fallout of the virus. Canada’s central bank cut rates Wednesday, also by half a percentage point.

Some measures of fear in the market eased. Treasury yields rose but were still near record lows in a sign that the bond market remains concerned about the economic pain possible from the fastspreading virus. Companies around the world are already saying the virus is sapping away earnings due to supply chain disruptions and weaker sales, with General Electric becoming the latest to warn its investors.

Even though many investors say they know lower interest rates will not halt the spread of the virus, they want to see central banks and other authorities do what they can to lessen the damage. The S&P 500 sank 2.8% Tuesday after a brief relief rally triggered by the Fed’s rate cut fizzled.

“Monetary policy can only take us so far, but at least it’s a step,” said Jack Ablin, chief investment officer at Cresset.

The Bank of England has a meeting March 26 on interest rates. The European Central Bank and others around the world have already cut rates below zero. But economists say they could make other moves, such as freeing up banks to lend more.

An indicator of fear in the market, which measures how much traders are paying to protect themselves from future swings for the S&P 500, sank 14.8%.

Health care stocks in the S&P 500 jumped 5.8% for the biggest gain among the 11 sectors that make up the index. UnitedHealth Group jumped 10.7%, Anthem soared 15.6% and Cigna climbed 10.7%.

A Biden nomination would be more welcome on Wall Street than a nod for Sanders, who is campaigning on a “Medicare for All” proposal. “It’s probably a trend toward more of the same in terms of the market and the regulatory and business environment,” said Ablin. “I don’t think investors are looking for revolution.”