Stocks recover after three-day rout

U.S. stock markets closed with significant gains early Wednesday following three days of dramatic drops that put the Nasdaq into a correction with a loss of more than 10 percent.

The Dow Jones Industrial Average closed up 440 points, or 1.6 percent, after being up as much as 700 in midday trading. The S&P 500 rose 67 points, or 2 percent, and the Nasdaq bounced 294 points higher, or 2.7 percent, as tech stocks recovered.

Markets saw a tough sell-off in the last week after a prolonged period of frothy growth, which some critics said was overblown, given the still-dire state of the economy due to the coronavirus pandemic.

Others lamented that rising stocks continued to pad the pockets of the wealthy, who own a majority of stocks, while regular people dealt with high levels of unemployment, increasing inequality.

Record-low interest rates have helped markets recover from severe drops in March, at the onset of the pandemic, to new record highs in recent months.

Updated at 4:05 p.m.