The Dow Jones Industrial Average surged over 1,000 points by the close of trading on Wednesday, amidst hopes for more stimulus measures to fight the virus outbreak and Democratic primary wins by Joe Biden.
According to FOX Business, the Dow Jones Industrial Average rallied over 1,173 points, the second-best point gain ever. Meanwhile, the S&P 500 rose 3.55 percent, and the NASDAQ rose about three percent.
The Associated Press reported on Wednesday that leaders in Congress have agreed on an $8.3 billion bill to battle the COVID-19 coronravirus.
"The fact that you get an $8 billion bill, that's money that will be spent, hopefully, on something that really will have an impact on mitigating the effects on the economy," said Tom Martin, senior portfolio manager with Globalt Investments.
Investors are also anticipating other central banks will follow up on the Federal Reserve's emergency rate cut Tuesday by half a percentage points in hopes of protecting the economy from the economic fallout of a fast-spreading virus. Canada's central bank cut rates on Wednesday, also by half a percentage point and citing the virus' effect.
Health Care, Tech Stocks Drove Rally
Health care stocks led the rally after a strong performance by Democrat Joe Biden in state primaries on Tuesday moved him to top-tier status for the Democratic presidential nomination. Many investors believe he is more friendly to businesses than the other top contender, Bernie Sanders, whose proposals for health care and the economy could hurt profits at insurers and other companies.
"It's probably a trend toward more of the same in terms of the market and the regulatory and business environment," said Jack Ablin, chief investment officer at Cresset. "I don't think investors are looking for revolution."
Health care stocks in the S&P 500 jumped 5.4% for the biggest gain among the 11 sectors that make up the index. UnitedHealth Group rose 13.7%, Anthem jumped 14.6% and Cigna climbed 14.1%.
Technology stocks also drove much of the gains Wednesday. Apple climbed 3.4% and Microsoft rose 2.1%.
Markets have been on edge for two weeks, with the S&P 500 down 8.5% 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. They need to see the number of new infections at least slow its acceleration, analysts say.
The Associated Press (AP) contributed to this report.