By Yasin Ebrahim
Investing.com - Wall Street closed sharply higher Tuesday in what was a turbulent session, with the broader market swinging between gains and losses as investors weighed up stimulus pledges from the White House against the ongoing spread of the novel coronavirus.
The S&P 500 rallied to end up 4.9%, Nasdaq Composite surged 4.5% and the Dow Jones Industrial Average rose 4.9%, or 1,163 points.
Several stimulus pledges from the Trump administration helped the broader market recover from its worst day since 2008. But it wasn't a straight-line recovery as uncertainty about the timing of the stimulus, including payroll tax cuts, weighed on investor sentiment.
President Donald Trump reportedly cleared up some of the uncertainty as reports suggested the payroll tax relief may be permanent.
Trump reportedly told Republican senators on Tuesday that he wants a payroll tax holiday through the November election so that taxes won’t go back up before voters decide whether to return him to office, Bloomberg reported, citing three people familiar with the president’s remarks. He also floated the idea of a permant suspension, CNBC reported.
The president also suggested supporting cash-strapped oil and gas and travel companies hit by the impact from coronavirus outbreak, sending travel and energy sectors sharply higher.
The announcement arrived just after U.S. Vice President Mike Pence said insurance companies would cover coronavirus treatment and also waive co-payment for testing.
"All the insurance companies here, either today or before today, have agreed to waive all co-pays on coronavirus testing and coronavirus treatment in their benefit plans,” Pence said. "Medicare and Medicaid already made it clear to Medicare and Medicaid beneficiaries that coronavirus would be covered and treatment."
Tech led the broader move higher, as investors took advantages of a slump in FANG stocks, with Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) rising more than 4% and touted as good rebound opportunities.
"Three FANG stocks (Facebook Amazon, Alphabet) seem like a good place to look for a rebound from one of the most significant market pullbacks in years," Baird said.
Oil, which had led the historic sell-off on Wall Street a day earlier, rebounded 8% on hopes that talks between OPEC and Russia remain possible to avert a potential price war.