Stocks bounced back on Tuesday, Feb. 6 after having swung wildly in and out of positive territory throughout much of the session.
The Dow Jones Industrial Average finished up 567 points, or 2.3%. At its lows for the day, the Dow dropped as much as 567 points, putting the index into correction territory.
The blue-chip index dropped 1,175 points, or 4.6%, on Monday, Feb. 5, the largest single-day point drop ever.
The S&P 500 finished up by 1.74% after it plunged 4.1% on Monday. The Nasdaq was up 2.13%.
The catalyst for Monday's selloff came as bond yields spiked after the U.S. added 200,000 jobs to payrolls in January, above forecasts, and yearly wage gains rose at the fastest pace since the Great Recession of 2008-2009. For many traders, the wage gains were a sign the Federal Reserve will have to pick up the pace of its rate hikes.
Bond yields, the original trigger to last week's selling, were down 0.02% to 2.775% on Tuesday, after hitting a four-year high of 2.885% on Monday.
"(Monday's) market drop, while understandably unsettling to investors, just takes us back about two months," said Bankrate.com's chief financial analyst Greg McBride. "The S&P 500 last closed lower than this on Dec. 7. Market corrections are normal, no matter how nerve wracking they are at the time. Just hang in there, maintain a long-term perspective and resist the urge for any knee-jerk reactions."
Wall Street's key benchmark for near-term volatility settled on Tuesday to 34.55 following a triple-digit percentage surge on Monday. At one point Tuesday, the VIX rose to over 50, the highest level since August 2015.
European stocks fell on Tuesday, and Asian markets followed suit. The Nikkei 225 in Tokyo plunged 4.7%; at one point it had declined 7%.
Allergan PLC (AGN) posted fourth-quarter adjusted earnings of $4.86 a share, beating forecasts of $4.74.
The stock gained 1.8% following the release of the earnings and after Allergan said Tuesday that its migraine drug saw positive results in a late-stage clinical trial.
Toyota Motor Corp. (TM) saw its profit nearly double in the fiscal third quarter, and the Japanese automaker lifted its annual profit projection through March to 2.4 trillion yen ($22 billion), a record high. American depositary receipts of Toyota rose 5% on Tuesday.
"This is the best earnings we have had in recent history ... All of the businesses are firing on all cylinders," CEO Bob Dudley told CNBC on Tuesday. ADRs of BP rose 2%.
"Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct," the company said in a statement.The stock fell gained 1.5% on Tuesday.