NEW YORK -- U.S. stocks ended sharply up Friday, posting the biggest rally since 2008, as President Donald Trump declared a national emergency to free up $50 billion for the fight against the coronavirus.
The Dow Jones Industrial Average closed 1,985 points or 9.4% higher at 23,185, while the S&P 500 surged 9.3% to 2,711.
Coming a day after the biggest declines in three decades, the Dow kicked off the day strong, immediately gaining 1,300 points, while the S&P 500 climbed more than 5%, regaining lost ground.
Later the market pared back some of the gains as news of closures of schools, landmarks and events were reported one after another. But the Dow turned upward as House Speaker Nancy Pelosi delivered a statement promising to pass a coronavirus economic aid package.
The gains followed central bankers moving to inject liquidity into markets and U.S. lawmakers apparently nearing a deal on a stimulus package. Oil prices and the dollar rebounded, while 10-year Treasury yields recovered to nearly 1%.
Ahead of the market open, U.S. Treasury Secretary Stephen Mnuchin appeared on CNBC and promised ample liquidity.
"There will be liquidity available. Whatever we need to do, whatever the Fed needs to do, whatever the Congress needs to do, we will provide liquidity," he said. "This will be an entire, whole-of-government approach led by the president."
Calling the current market sell-off a "short-term issue," Mnuchin said this will be a great investment opportunity as it was after the 1987 market crash, and that he expects a "big rebound in economic activity" by the end of the year. He said suspending student loan debt payment was among some 50 measures officials were proposing to U.S. President Donald Trump to soften the blow to the economy.
After the Federal Reserve Bank of New York's move Thursday to provide $1.5 trillion in short-term liquidity to markets this week alone, the People's Bank of China cut reserve requirement ratios for banks Friday in a move it said would release 550 billion yuan ($78.5 billion) in liquidity.
The European Union indicated it would give member countries more freedom to spend to reinforce coronavirus-hit economies.
Friday's rally only partly erased the damage from a rout that left U.S. equities in a bear market less than a month after reaching record highs in February.
In Asia, circuit breakers temporarily halted trading Friday on sell-offs in the Philippines, Indonesia, Thailand and India amid a flight from risk.
Japan's Nikkei Stock Average sank as much as 10%, its steepest drop since April 1990, before closing down 6%. Stocks in China and Hong Kong also closed lower but recovered from heavier losses in early trading.