Financial Markets Wall Street

Stock traders work at the New York Stock Exchange, Tuesday, March 17, 2020 in New York. (AP Photo/Mark Lennihan)

NEW YORK — Stocks rallied Tuesday as President Donald Trump promised he’s “going big” with plans to prop up the staggering economy through the coronavirus outbreak.

Besides the White House’s proposal, which could approach $1 trillion, the Federal Reserve also announced its latest emergency move to get markets running more smoothly. The S&P 500 climbed 6% to claw back a little less than half of its historic loss from the day before.

Even a 5% move used to be extremely rare, but it’s become the norm this month as investors see a recession as increasingly likely, if not already here. Many professional investors expect the market’s big swings in both directions to continue until health experts get the new coronavirus in check.

“Government tends to show up late to the party with a bazooka,” said Barry Bannister, head of institutional equity strategy at Stifel. “It’s a bit of an overreaction, but that’s to be understood as normal for policy makers.”

Trump wants the government to send checks to Americans in the next two weeks to help support them while chunks of the economy come closer to shutting down, Treasury Secretary Steven Mnuchin said Tuesday.

Mnuchin briefed Senate Republicans on the proposal, which could also include $50 billion for the airline industry and $250 billion for small businesses. The travel industry has been among the industries hardest hit by the outbreak. Planes sit grounded and hotels and casinos shut their doors.

Investors have been waiting for Washington to offer more aid for the economy.

After flipping between gains and losses Tuesday morning, stocks turned decisively higher after the Federal Reserve revived a program first used in the 2008 financial crisis to help companies get access to cash for very short-term needs.

“There are still a lot of questions in the mind of the market as to what will be enough,” said Robert Haworth, senior investment strategist at U.S. Bank Wealth Management. “It’s a start, but there’s still a lot to be determined.”

Ultimately, investors say they need to see the number of infections slow before markets can find a bottom. Worldwide cases now exceed 190,000. In the San Francisco area, nearly 7 million people were all but confined to their homes in the nation’s most sweeping lockdown.

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