March 24 (Reuters) - Wall Street bounced from three-year lows on Tuesday on hopes of a major fiscal stimulus to blunt the economic damage from the coronavirus pandemic, while Boeing surged on signs that its grounded jet could fly by the middle of the year.
All three main U.S. stock indexes jumped more than 5%, bouncing back from a brutal selloff in the previous session on fears of a deep global recession as entire nations shut down to prevent the virus from spreading.
The S&P 500 has lost more than $9 trillion in value from its mid February record high, while the Dow Jones erased over three years of gains in one month.
Hopes are now running high of the U.S. Senate passing a $2 trillion stimulus bill, aimed at providing financial aid to Americans out of work and help distressed industries.
"Fiscal stimulus is absolutely necessary because it directly effects the consumer and consumer spending and consumer confidence is what's driving the U.S. economy," said Nancy Perez, senior portfolio manager at Boston Private Wealth in Miami.
A separate proposal from Democrats in the U.S. House of Representatives to grant airlines and contractors a $40 billion bailout lifted shares of American Airlines, Delta Airlines and United Airlines 15% to 17%.
Boeing, once a symbol of U.S. manufacturing strength, jumped 17% after Chief Executive Officer Dave Calhoun said the company still expected a "mid-year" return to service of the 737 MAX aircraft.
The planemaker has lost more than two-thirds of its value so far this year as the health crisis crimped travel demand, forcing it to seek $60 billion in U.S. government loans for the aerospace industry.
Meanwhile, traders remained doubtful of a long-lasting recovery in financial markets without any evidence of a peaking in the number of new COVID-19 cases.
"What we don't know at this stage is how long it will take to contain the virus that is still spreading exponentially, and what kind of damage that will do to both populations and economies across the globe," said Andy Scott, associate director at Chatham Financial in London
Data on Monday showed U.S. business activity hit a record low in March, bolstering economists' views that the economy was already in recession.
Still, there were broad gains on Wall Street as the S&P energy index rose nearly 10%, the most among the 11 major sectors, tracking a surge in oil prices.
Chevron Corp rose 20.7%, after it said it would cut capital spending by $4 billion this year.
At 10:25 a.m. ET the Dow Jones Industrial Average was up 1,446.34 points, or 7.78%, at 20,038.27, the S&P 500 was up 152.18 points, or 6.80%, at 2,389.58 and the Nasdaq Composite was up 430.45 points, or 6.27%, at 7,291.13.
Advancing issues outnumbered decliners more than 13-to-1 on the NYSE and 7-to-1 on the Nasdaq.
The S&P index recorded no new 52-week high and one new low, while the Nasdaq logged two new highs and 36 new lows. (Reporting by Uday Sampath and Medha Singh in Bengaluru; Editing by Sagarika Jaisinghani and Arun Koyyur)
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