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Wall Street has surged as investors hunted for bargains following reassurances by central banks that they stood ready to counter the economic impact from the coronavirus following last week’s steep sell-off.

The S&P 500 and Nasdaq pared gains but remained up more than four per cent, with the Dow Jones Industrial Average up over five per cent, after health officials revised the total number of coronavirus cases in the state of Washington to 18, including six deaths.

Apple bounced back from a two-year low to jump 5.5 per cent and lift the S&P 500 more than any other company.

The S&P 500 was on track for its best one-day gain since August. That followed the US stock market’s worst week since the 2008 financial crisis, sinking into correction territory on Thursday due to fears of a recession resulting from the epidemic.

Bank of Japan Governor Haruhiko Kuroda said on Monday that Japan’s central bank would take necessary steps to stabilise financial markets. That followed a similar move by Fed Chair Jerome Powell last Friday.

“We can shrug off an economic downturn, but if it starts to spill into companies’ capacity to pay their debts, then that creates deeper problems. But it seems to me like the central banks are linking arms to find a way to insulate the credit markets from economic uncertainty,” said Jack Ablin, Chief Investment Officer at Cresset Wealth Advisors in Chicago.

Traders see a 100 per cent chance of a 50 basis point rate cut at the Fed’s March meeting, according to CME Group’s FedWatch tool.

The S&P 500 surged as much as 2.9 per cent before relinquishing some of that gain.

The Dow Jones Industrial Average was up 5.09 per cent at 26,703.32 points, while the S&P 500 was up 4.6 per cent at 3,090.23.

The Nasdaq Composite added 4.49 per cent to 8,952.16.

“The sell-off was so fierce last week that you do have some buy-the-dip investors emerging,” said Brent Schutte, chief investment strategist, Northwestern Mutual Wealth Management Company.

The Institute for Supply Management said domestic manufacturing activity barely expanded last month due to supply issues stemming from the virus outbreak.

“The Fed can cut rates all it wants, that is not going to put a person in a factory producing a product if that person is quarantined,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“I don’t think (monetary policy) solves the problem … This particular one is both supply and demand, it will help but it won’t fix the problem.”

Cancer drug developer Forty Seven Inc jumped 61 per cent after larger peer Gilead Sciences made a $4.9 billion offer for the firm. Gilead rose 5.8 per cent.

Surgical mask maker Alpha Pro Tech Ltd tumbled 17 per cent but remains up over 350 per cent year-to-date.

Advancing issues outnumbered declining ones on the NYSE by a 2.59-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favoured advancers.

The S&P 500 posted no new 52-week highs and 18 new lows; the Nasdaq Composite recorded 23 new highs and 136 new lows.