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* Indexes up: Dow 1.20%, S&P 1.47%, Nasdaq 1.84%
* Trump promises major measures to combat virus outbreak
* Officials discuss 90-day suspension of payroll tax - report (Updates to afternoon)
By Sanjana Shivdas and Medha Singh
March 10 (Reuters) - Wall Street rose 1% on Tuesday as investors pinned their hopes on policy easing by major central banks after global markets plummeted in the previous session on fears of a coronavirus-driven recession.
Traders now expect the Federal Reserve to cut interest rates for a second time this month, with President Donald Trump adding pressure to bring U.S. rates down to the level of "competitor nations".
All three indexes briefly turned negative in morning trade, but quickly reversed course as a report said the Trump administration had discussed a 90-day payroll tax suspension. (on.wsj.com/3aGq6kn)
"The primary action of a payroll tax cut will be to improve investor confidence in the short term," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.
"As long as people are able to hang on to their jobs, the payroll tax cuts will be quite supportive."
Boosting sentiment further, Vice President Mike Pence said private U.S. health insurance companies had agreed to cover coronavirus treatment and waive co-payment fees for tests.
Traders will also focus on Trump's news conference later in the day for further hints on measures to contain the outbreak, which has now infected more than 114,300 people globally and led to over 4,000 deaths.
Utilities and consumer staples — commonly considered bond proxies — were among the biggest decliners, while technology and consumer discretionary stocks edged higher.
Wall Street's main indexes plunged more than 7% on Monday, the 11th anniversary of the market's longest bull run, as oil prices plummeted following pledges by top producers Saudi Arabia and Russia to increase output in an over-supplied market.
At 1:32 p.m. ET, the Dow Jones Industrial Average was up 286.22 points, or 1.20%, at 24,137.24, and the S&P 500 was up 40.30 points, or 1.47%, at 2,786.86. The Nasdaq Composite was up 146.61 points, or 1.84%, at 8,097.29.
Rate-sensitive financial stocks firmed 0.8% after suffering their worst day in more than a decade as U.S. Treasury yields bounced off record lows.
United Parcel Service Inc gained 4.4% as Stifel raised its rating on the package delivery company, while Amazon.com Inc rose about 4% as Cowen & Co raised its price target on the retail giant's shares.
Wall Street's fear gauge slipped about 2.3 points to 52.20, after closing at its highest since the financial crisis.
Underlining the volatility in the market, advancing issues matched decliners almost 1-to-1 on the NYSE and the Nasdaq.
The S&P index recorded three new 52-week highs and 97 new lows, while the Nasdaq recorded five new highs and 514 new lows. (Reporting by Sanjana Shivdas and Medha Singh in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)