NEW YORK — Stocks are climbing again on Wall Street Wednesday. Maybe this time it will last.
The S&P 500 was up more than 2% in midday trading, a day after an even bigger gain suddenly vanished in the afternoon. Trading remained unsettled around the world Wednesday, with European stock markets down and Asian indexes mixed.
Markets have been incredibly volatile in recent weeks as investors blindly guess how badly the coronavirus outbreak will hurt corporate profits amid suffocating uncertainty. The economic damage is widespread, and France’s central bank said its economy entered a recession with a 6% drop in the first three months of the year.
Countering that has been unprecedented aid from governments and central banks, with discussions ongoing for even more. Some investors are also pointing to nascent signs that infections and deaths may soon be peaking or plateauing in several hotspots around the world.
Caught between those forces are investors, who have sent the S&P 500 down about 20% from its record set in February. Earlier, it had fallen as much as a third from that mark, reflecting investors’ expectations for a steep, sudden recession and drops in corporate profits. Where stocks go from here depends on how long it takes for the economy to reopen and get closer to what used to be normal.
Big moves normal
In the meantime, big moves for stocks have become the norm. A 1% move for the the U.S. stock market in a day used to be considered notable. Since the S&P 500 began selling off in February, it’s happened 85% of the time.
The S&P 500 was up 2.4%, as of 11:40 am. Eastern time. The Dow Jones Industrial Average rose 585 points, or 2.6%, to 23,244 and the Nasdaq was up 2.1%.
Stocks that have been beaten down the most since the sell-off began in February were leading the market, including energy companies, retailers, travel-related companies. That was also the early trend of Tuesday, before the gains vanished.
Gap rose 14.5%, United Airlines gained 10.3% and Marathon Petroleum was up 10%, though all three are still down more than 50% for 2020 so far.
Treasury yields, which signaled worries about the economic damage coming from the coronavirus outbreak earlier than the stock market, were relatively steady. The yield on the 10-year Treasury held at 0.73%.
Uncertainty, though, is still the dominant force in markets. The World Trade Organization said global trade could fall anywhere from 13% to 32% this year, and the drop could be worse than during the 2008-09 financial crisis. The wide range in the forecast was due to how unpredictable the pandemic is, which has caused businesses to shut down around the world in hopes of slowing the spread of the virus.
Companies are also preparing to report their financial results for the first three months of the year in upcoming weeks. The numbers are likely to be bleak, but investors don’t know how long that will last. McDonald’s on Wednesday pulled its forecast for sales, profit margins and and other measures for 2020 and the long term, citing the uncertainty created by the pandemic.
European markets dip
In Europe, stocks dipped as finance ministers clashed over a proposal to collectively combat the health crisis. Countries that have been hardest hit there by COVID-19 are also among those that can least afford to pay for it, such as Italy and Spain. But the outbreak is dragging on economies across the continent. German economists predict its economy will shrink 4.2% this year.
Germany’s DAX slipped 0.3%, and France’s CAC 40 fell 0.4%. The FTSE 100 in London lost 0.9%.
Trading in Asia was more mixed.
Japan’s Nikkei 225 rose 2.1%, while stocks in South Korea fell 0.9% and Hong Kong lost 1.2%.
Crude up 70 cents
Benchmark U.S. crude oil rose 70 cents, or 3%, to $24.35 a barrel Wednesday, recovering some of its 9.4% slide from the prior day. Oil prices have been even more volatile than stocks recently as Russia and Saudi Arabia argue about whether to cut production in the face of withering demand. Oil producers are set to meet on Thursday, and an announcement for production cuts to prop up the price of crude is possible.
Brent crude, the international standard, gained 8 cents to $31.95.
While many investors are preoccupied with the pandemic, energy remains another major factor driving trading.
Even Thursday’s meeting was in doubt after Iran demanded greater clarity on the scale of U.S. oil production before talks can start.
For “more immediate market stability concerns, all eyes and ears remain trained on the success of the OPEC+ meeting on Thursday,” Stephen Innes of AxiCorp said in a commentary.
More than 1.4 million cases of COVID-19 have been confirmed around the world, with more than 399,000 of them in the United States.