Stocks surge past coronavirus fears after worst week since 2008

The Dow Jones Industrial Average soared 5.1 percent Monday, gaining a record-breaking 1,297 points as stocks recovered some of their losses from Wall Street’s worst week in a decade.

The Dow shattered its all-time record for points gained in a single day of trading, while the S&P 500 rose 4.6 percent and the Nasdaq composite rose 4.5 percent. Monday’s rebound comes after all three indexes fell more than 10 percent last week after the first nontravel-related cases of coronavirus appeared in the U.S.

Public health officials have confirmed more than 100 cases of the potentially fatal respiratory illness in the U.S. as of Monday and at least six deaths. Analysts have warned that a widespread coronavirus outbreak within the U.S. could dampen economic growth for several months. 

Investors fled stocks throughout last week, plunging the Dow, S&P and Nasdaq into corrections. Tumultuous futures trading over the weekend led to a slight gain at the start of Monday trading before a massive rally heading into the closing bell.

Wall Street analysts attributed Monday’s rebound to an expectation that the Fed and other central banks would lower interest rates to bolster investor confidence and counteract an expected decline in demand. Investors are betting on the Fed to cut interest rates by half a percentage point by its meeting on March 17 and 18.

But Wall Street experts warned Monday that the one-day rally could easily slip away as the full extent of the coronavirus outbreak becomes apparent. 

“I think today’s bounce is telling you relatively little,” said Peter Cecchini, chief markets strategist at investment firm Cantor Fitzgerald.

“The virus itself is not very well understood,” he added.