Markets retreat from major rallies to close in the red

Stock markets retreated from a heady day of gains on Tuesday, defeating hopes for a second blockbuster day in a row and closing in the red.

The Dow Jones Industrial Average closed down 26 points (0.1 percent), after spiking nearly 900 points (4 percent) in the early hours of morning trading.

The S&P 500 closed down 4 points (0.2 percent), after initially opening up 92 points (3.5 percent).

On Monday, the Dow closed up 1,600 points (7.7) percent amid signs that efforts to slow the coronavirus’s spread were taking hold in places such as New York.

Markets have remained extremely volatile since the pandemic took hold, shedding more than a fifth of their value since reaching record highs in February.

But with a massive injection of cash from a $2.2 trillion government stimulus, and hope of more already on the way, markets have also recovered some 20 percent from the low points they hit in late March.

Questions remain about how quickly the economy will be able to recover.

Former Federal Reserve Chair Janet Yellen said Monday that unemployment was likely already at 12 or 13 percent, and warned that complications could thwart a quick, “V-shaped” recovery once lockdowns ended.

All eyes are on Wuhan, China, where the virus is thought to have originated and suffered one of the worst outbreaks.

On Tuesday, the lockdown in the city ended after more than 10 weeks. Its economic recovery and the policies surrounding it are likely to inform expectations for recoveries elsewhere.