Markets rebound on stimulus promises, Fed action

U.S. stock markets rebounded Tuesday after one of their worst drops in history a day earlier, as President Trump and Congress advanced economic stimulus plans and the Federal Reserve took actions to shore up the financial system in the face of the coronavirus pandemic.

The Dow Jones Industrial Average closed up 1,049 points, or 5.2 percent percent, recovering a portion of its nearly 3,000-point drop on Monday, the third worst day in its history.

The index, which peaked at more than 29,500 just last month, briefly hovered below 20,000 in the morning hours, before rebounding to a 21,238 close.

The market jumped after the Federal Reserve announced it would expand its bond-buying efforts to include corporate bonds in an effort to help provide businesses with short-term funding.

Traders took further solace as the Trump administration took up a plan to send stimulus checks to all Americans. On Monday, Sen. Mitt Romney (R-Utah) floated the idea of sending every American $1,000 checks to bolster the economy.

Meanwhile, Senate Majority Leader Mitch McConnell (R-Ky.) said the Senate would approve a $104 billion House-passed stimulus package, providing for free coronavirus testing and bolstering paid sick and family leave.

Treasury Secretary Steve Mnuchin was also at the Capitol to pitch a broader, $850 billion stimulus bill.

Still, the outlook remained dour for the near-term, as social distancing and efforts to prevent further coronavirus spread shuttered businesses, canceled large events and ground much of the economy to a halt.

Analysts said a global recession was a near certainty, and S&P Global said the U.S. was likely already in a recession.