U.S. stocks rallied Tuesday as China provided further support to its financial markets to manage the economic impact of the coronavirus outbreak.
The Dow Jones industrial average jumped 500 points, extending gains from the previous session. The Standard & Poor’s 500 added 1.7%. The technology-heavy Nasdaq Composite rose 2%, hitting an intraday record high.
Stocks in the U.S. received a boost as overseas markets stabilized overnight. The Shanghai Composite closed 1.3% higher, after plunging 8% a day earlier as the People’s Bank of China reportedly put another $57 billion in funds into the markets. That followed an injection of a net 150 billion yuan ($21 billion) on Monday.
“China is making serious efforts to cushion the economic blow there and will continue to do so,” John Vail, chief global strategist at Nikko Asset Management, said in a note. “But the effects of this virus will likely be long-felt, at least psychologically.”
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The central bank had announced in advance that it would put 2 trillion yuan ($173 billion) into the market through reverse repurchases of securities on Monday when the markets reopened after a 10-day break that was prolonged to help reduce risks of further spreading the virus. The lion’s share of that money went to cover maturities falling due.
Markets in Europe also rose. Germany’s DAX gained 1.7% and France’s CAC 40 climbed 1.6%. Britain’s FTSE 100 added 1.5%.
In the U.S., investors snapped up tech stocks, which are often sensitive to China’s economic health because of ties to supply chains and sales. Apple rose 2.3% and chipmaker Nividia climbed 1.9%.
Banks and health care stocks also made big gains. Citigroup rose 2.2% and UnitedHealth Group climbed 3%.
Utilities, real estate companies and other safe-play assets lagged the market as investors became more comfortable taking on risk. Prices for U.S. government bonds fell sharply and the price of gold also fell.
Bond prices fell sharply. The yield on the 10-year Treasury rose to 1.59% from 1.52% late Monday.
Contributing: Damian J. Troise, The Associated Press