Dow regains 1,167 points in volatile session

US stocks rallied to a strong finish in a seesaw session Tuesday as the market rebounded from its steepest one-day decline since the 2008 financial crisis.

Shares of Apple, Amazon, Netflix, Home Depot and Google-parent Alphabet closed higher as the market regained more than half of Monday's loss. Technology and financial stocks also climbed.

The Dow Jones Industrial Average closed up 1,167.14 points, or 4.89 percent, at 25,018.16. The S&P 500 rose 135.67 points, or 4.94 percent, and ended the day at 2,882.23. The Nasdaq Composite closed at 8,344.25, up 393.58 points or 4.95 percent.

The US market hasn't had a downturn similar to Monday's rout since the subprime market collapsed in 2008.

Volatility may suggest the market is in the middle of a recovery that could take days or weeks to play out.

The market has been spooked by the possibility that the coronavirus will disrupt supply chains and cause extensive economic damage. An economic slowdown would make many stocks overpriced.

"While we believe that a fiscal stimulus package will be produced, the timing and scope remain uncertain," Ed Mills, a Washington policy analyst for Raymond James, said Tuesday in a research note.

"When asked about the potential for a fiscal package, some Republican leaders on the Hill signaled that they believe these actions to be premature and key Congressional Democrats (are) arguing that there are more immediate priorities over tax cuts and plan to introduce their own package in coming days."

Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management, told CNBC, "Fiscal stimulus is the antidote that can bridge the gap between what was happening before the coronavirus and what will happen after it. It certainly can't cure the virus, but it can help contain some of the economic fallout. Today's trading activity is the market trying to gauge whether the stimulus is going to be sufficient."

On Monday, the Dow plunged 7.8 percent and the S&P 500 skidded 7.6 percent. The Dow's 2,013-point drop was the largest ever for the 30-stock blue-chip index and triggered an automatic 15-minute halt to trading.

The market's plunge threatened to end the longest bull market in history. Through Monday's close, the S&P 500 was 19 percent below its intraday all-time high of 3,393.52 reached Feb 19.

Treasury yields recovered Tuesday. The price of the 10-year note declined, but the yield rose slightly and closed at 0.805, suggesting the flight to safety may be over — for now.

Oil prices rebounded Tuesday. US West Texas Intermediate crude futures rose by $3.36 a barrel, or 10.86 percent to $34.52. Brent crude futures, the international benchmark, climbed 53 cents, or 1.53 percent to $37.74 a barrel.

On Monday, oil prices plunged amid fears of economic disruption caused by the coronavirus. The market was further roiled by a price war between Saudi Arabia and Russia that threatened to create a market glut and drive prices still lower.

Writing in The Wall Street Journal, Daniel Yergin, author of The Prize: The Epic Quest for Oil, Money & Power, said Russia may be an energy superpower, but it has been overtaken by the US, which produces more oil and more gas — and considerably more oil than Saudi Arabia.

"The US is also on the way to becoming one of the world's major exporters of natural gas, in its liquefied form. That provided another reason for Moscow to stem US production.

"(American) shale is not low cost and (action by Russia) will put pressure on US producers. Companies will reduce or stop drilling. Some will go bankrupt or merge, and US production will flatten out or if prices stay down, decline. For how long? That will depend on how long the virus continues to attack the health of the world economy."