NEW YORK —
Stocks rose on Wall Street early Wednesday to claw back some of their sharp losses from the day before in yet another day of big swings for the market.
Health care stocks had the markets biggest gains after a strong performances by Joe Biden in state primaries on Tuesday moved him to top-tier contender status for the Democratic presidential nomination. Many investors believe he is more friendly to businesses than rival Bernie Sanders, whose proposals for health care and the economy could hurt profits at insurers and other companies.
Investors are also waiting to see if other central banks will follow up on the Federal Reserves surprise move Tuesday to slash interest rates by half a percentage point in hopes of protecting the economy from the economic fallout of a fast-spreading virus.
The S&P 500 was up 1.5%, as of 10 a.m. Eastern time. It recovered just over half its loss from the day before, when worries flared that rate cuts would not be able to halt the spread of the virus. The Dow Jones Industrial Average climbed 510 points, or 2%, to 26,427, and the Nasdaq rose 1.3%.
Even though many investors say they know lower interest rates will not solve the health crisis, they want to see central banks and other authorities do what they can to lessen the damage. Companies around the world are already warning that the virus is sapping away earnings due to supply chain disruptions and weaker sales. The S&P 500 sank 2.8% on Tuesday after a brief relief rally triggered by the Feds rate cut fizzled, as doubts rose about how effective lower rates will be in this health crisis.
The bond market, which was among the earliest to flash red flags about the economic pain from the virus, was still showing caution. The yield on the 10-year Treasury fell to 0.97% from 1.01% late Tuesday, a day after sinking 0.08 percentage points and dipping below 1% for the first time in history. Yields fall when investors are worried about weaker economic growth and inflation.
The two-year Treasury yield, which moves more on expectations for Fed actions, slumped to 0.63% from 0.71% as traders increase bets that the Fed will cut rates even deeper this year.
A measure of fear in the market, which measures how much traders are paying to protect themselves from future swings for the S&P 500, eased by more than 8% in morning trading.
Health care stocks in the S&P 500 jumped 3.6% for the biggest gain by far among the 11 sectors that make up the index. UnitedHealth Group surged 11.8%, Anthem jumped 14.1% and Cigna rose 10%.
Markets have been on edge for two weeks, with the S&P 500 down 10% from its record on Feb. 19, amid worries about how much economic damage the coronavirus will do. The big swings in recent days will likely continue until investors get a sense of what the worst-case scenario really is in the virus outbreak.
Indexes jumped on Monday, and the Dow had its best day in more than a decade on rising anticipation for coordinated support from the Fed and other central banks. That followed a dismal week that erased gains for 2020.
Companies are lining up to warn investors that the virus is hitting their bottom lines. General Electric became the latest Wednesday, when it said the virus will mean a drag of up to $300 million on its operating profit.