By Caitlin McCabe, Anna Hirtenstein and Xie Yu 

U.S. stocks ran out of steam Tuesday in volatile trading session that saw the Dow Jones Industrial Average give up an early gain of more than 900 points.

Major indexes appeared poised to build on Monday's mammoth gains but wobbled in the final hour of the trading session and slid into the red as the closing bell rang. Stocks from Intel to UnitedHealth to Morgan Stanley ended lower after rallying earlier in the day.

Much of the early optimism was tied to small signs of success in the global fight against the coronavirus pandemic. Stocks were buoyed by an announcement from New York Gov. Andrew Cuomo, who said the state -- the hardest hit in the U.S. by the virus -- has projected that it is reaching a plateau of daily hospitalizations. And globally, countries including Spain have seen the daily toll of new infections and deaths slow.

Still, by the end of the day, investors appeared unable to put their faith in projections that coronavirus hot spots had turned a corner.

"This is slowly degrading like the Titanic," said Ken Moraif, founder of Retirement Planners of America. "The people who are buying right now don't believe how bad this really is."

The Dow industrials shed 26.13 points, or 0.1%, to finish the day at 22653.86. The blue chips rose as much as 4.1% earlier in the session as they attempted to build on Monday's 7.7% gain. The S&P 500 lost 4.27 points, or 0.2%, to 2659.41.

Both indexes suffered their steepest intraday reversals in more than a decade: For the Dow, Tuesday's was the largest blown gain since Oct. 14, 2008, when the index climbed as much as 5.7% before closing down 0.8%

Both indexes are still down about 20% from their mid-February highs.

For weeks, investors have parsed economic and health data to try to determine how severely the coronavirus pandemic will dent the economy.

Mr. Moraif said his company, which had $4.5 billion in assets under management at the end of 2019, sold all equity and bond positions in recent weeks, opting instead for only cash. He remains skeptical that the economy can make a fast recovery once businesses begin opening up and employees return to work.

"I'm having difficulty in understanding how a small business that has gone bankrupt is going to go back into business because we have reached the peak of infections," Mr. Moraif said.

Authorities have warned that the coronavirus infections in the U.S. and U.K. are likely to worsen in the coming week. Even in New York, where demand for intensive care units has decreased, Mr. Cuomo said Tuesday that the state reported its highest number of deaths in a single day. Nearly 12,000 people have died from the virus across the U.S., and the number of infected Americans hovers below 400,000, according to data from Johns Hopkins University.

Even more, economic indicators have shown that a deep recession may be looming. The Mortgage Bankers Association said Tuesday that mortgage forbearance requests surged in the second half of March as millions of Americans sought unemployment benefits after the pandemic shuttered businesses.

Travel and leisure stocks were again among the bright spots in markets Tuesday. American Airlines Group rose 7.6%, JetBlue Airways jumped 13%, and United Airlines added 1.9%.

Among cruise lines, Royal Caribbean Cruises gained 13%, Carnival jumped more 11%, and Norwegian Cruise Line Holdings rose 10%. All six stocks remain down more than 50% for the year.

Meanwhile, in London, EasyJet climbed 15% after the carrier tapped a U.K. government-aid program for short-term credit. The company's ability to access the funding suggests that it could withstand the economic downturn, provided that the spread of the coronavirus continues to slow, according to Michael Hewson, chief market analyst at brokerage CMC Markets.

"Markets are pricing in a return to normality for airlines sooner rather than later," Mr. Hewson said.

Global leaders and corporate executives have warned this week that a U.S. recession could be deep and severe. Former Federal Reserve Chair Janet Yellen said Monday in an interview on CNBC that she expects the U.S. economy to decline at least 30% in the second quarter. She also said she was "afraid we will see bankruptcies" and that "companies may end up with debt burdens that make them unwilling to restore investment spending or re-hire workers."

Still, some appetite for risk among investors prompted investors to sell the safest government bonds. The yield on the 10-year U.S. Treasury note rose to 0.735%, from 0.675% Monday. Yields rise as bond prices fall.

Meanwhile, oil prices fell after starting the day higher. Brent crude, the global gauge of oil prices, slid 3.6% to $31.87 a barrel, as demand for oil has fallen during the pandemic and Russia and Saudi Arabia continue a price war.

Beyond the U.S., the pan-continental Stoxx Europe 600 ended the day higher, rising 1.9%. Japan's Nikkei 225 and China's Shanghai Composite both rose more than 2%.

"People are trying to identify risks and opportunities now," said Bruce Pang, head of macro and strategy research at China Renaissance Securities.

"China's case shows when new infections peaked out, the market would bottom out," he added, noting that the trend is what some global investors may now expect.

Write to Caitlin McCabe at, Anna Hirtenstein at and Xie Yu at


(END) Dow Jones Newswires

April 07, 2020 18:00 ET (22:00 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
UnitedHealth (NYSE:UNH)
Historical Stock Chart
From Jun 2020 to Jul 2020 Click Here for more UnitedHealth Charts.
UnitedHealth (NYSE:UNH)
Historical Stock Chart
From Jul 2019 to Jul 2020 Click Here for more UnitedHealth Charts.