Updated at 1:26 p.m. ET
Stock prices rebounded somewhat Friday, one day after a punishing drop triggered by fears that the coronavirus cases are increasing in the Sunbelt.
The Dow Jones Industrial Average was up nearly 800 points shortly after the market opened, but later fell back considerably and had risen just 238 points in early afternoon trading, a gain of 1%. The broader S&P 500 index was up about 0.6%.
A day earlier, the Dow lost 1,861 points, or about 7%, and the S&P 500 dove nearly 6%.
Much of Friday's increase appeared tied to bargain-hunting by investors searching for good deals after Thursday's rout. Boeing, which lost 16% on Thursday, was back up 8% Friday afternoon.
The market remained unusually volatile following reports about a spike in some Sunbelt states, such as Florida and South Carolina. Florida reported nearly 1,700 new cases Thursday — the biggest jump since March. South Carolina announced nearly 700 new cases, a record high.
Meanwhile, Houston is considering reimposing lockdowns, and California said it's seen more hospitalized patients than any time since May 13.
The surge has triggered fears that a second wave of cases is cresting, which would be devastating to an economy that's already slowed down sharply.
Consumer confidence remains low, but rose this month. The University of Michigan's closely watched index climbed to 78.9, from 72.3 in May. It was 98.2 a year ago.
"We think consumer attitudes could quickly sour if there is a renewed increase in the rate of COVID infections and if Congress doesn't renew unemployment benefits set to expire at the end of July," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
Adding to investors' anxiety was this week's gloomy pronouncement from the Federal Reserve that unemployment would be 9.3% at year's end, a drop from current levels but still very high.
"It is a long road. It is going to take some time," Fed Chairman Jerome Powell told reporters on Wednesday.
President Trump, who has often attacked Powell, said in a tweet that the Fed has often been wrong in its predictions. He also reiterated assurances that the economy will rebound sharply by the last three months of 2020.