U.S. stocks rallied Tuesday as China provided further support to its financial markets to manage the impact of the coronavirus outbreak.
The Dow Jones industrial average jumped 407.82 points to end at 28,807.63, notching gains for a second consecutive session. The Standard & Poor’s 500 added 1.5% to close at 3,297.59. The technology-heavy Nasdaq Composite rose 2.1% to finish at 9,467.97, hitting another all-time high.
Stocks in the U.S. received a boost as overseas markets stabilized overnight. The Shanghai Composite closed 1.3% higher, after plunging 8% a day earlier as the People’s Bank of China reportedly put another $57 billion in funds into the markets. That followed an injection of a net 150 billion yuan ($21 billion) on Monday.
"China is making serious efforts to cushion the economic blow there and will continue to do so," John Vail, chief global strategist at Nikko Asset Management, said in a note. "But the effects of this virus will likely be long-felt, at least psychologically."
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The central bank had announced in advance that it would put 2 trillion yuan ($173 billion) into the market through reverse repurchases of securities on Monday when the markets reopened after a 10-day break that was prolonged to help reduce risks of further spreading the virus. The lion’s share of that money went to cover maturities falling due.
In the U.S., investors snapped up tech stocks, which are often sensitive to China’s economic health because of ties to supply chains and sales. Apple rose 3.3% and chipmaker Nvidia climbed 2.8%.
Banks and health care stocks also made big gains. Citigroup rose 1.8% and UnitedHealth Group climbed 2.5%.
Tesla’s stock soared again, jumping 14%. Shares have rallied this week following an optimistic report on the company's electric car prospects.
Utilities, real estate companies and other safe-play assets lagged the market as investors became more comfortable taking on risk.
Prices for U.S. government bonds fell sharply and the price of gold also fell. The yield on the 10-year Treasury jumped to 1.60% from 1.52% late Monday.
Markets in Europe also rose. Germany’s DAX gained 1.8% and France's CAC 40 climbed 1.8%. Britain’s FTSE 100 added 1.6%.
Contributing: Damian J. Troise, The Associated Press
This article originally appeared on USA TODAY: Coronavirus: Dow rallies 400 points as China provides further support to financial markets