US STOCKS-S&P 500 set to recover $1 trillion in value as virus deaths slow

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* Utilities lead gains among major S&P 500 sectors
* Banks stocks track Treasury yields higher
* Volatility index falls to two-week low
* Indexes surge: Dow 5.68%, S&P 5.61%, Nasdaq 5.56%

(Updates to early afternoon)
By Uday Sampath Kumar and Shreyashi Sanyal
April 6 (Reuters) - The S&P 500 was on track to recover
about $1 trillion in market value in a furious rally on Monday
after a drop in the daily death toll in New York, the country's
biggest coronavirus hot spot, raised hopes that the pandemic
could level off soon.
All three main stock indexes jumped more than 5%, with the
blue-chip Dow Industrials adding 1,200 points. Defensive
utilities .SPLRCU sector led with big gains, while consumer
staples .SPLRCS and real estate .SPLRCR - also considered
safe bets during times of volatility - rose between 3% and 8%.
The S&P 500 banking index .SPXBK jumped 7.2% and was set
for its best day in more than a week. Bank of America BAC.N ,
Citigroup C.N , Wells Fargo WFC.N and JPMorgan JPM.N
advanced between 5.8% and 8.8%, tracking Treasury yields. US/
"All the market cares about right now is the virus and any
positive event will see some buyers coming in," said Dennis
Dick, proprietary trader, at Bright Trading LLC in Las Vegas.
"With New York City numbers getting better on the weekend,
people are happy that we may be closer to the top of the peak
than we thought."
Still, U.S. officials have girded the country for a "peak
death week" from the pandemic, with the death toll topping
10,000. Wall Street's fear gauge .VIX fell to its lowest in two
weeks, but analysts cautioned against calling a bottom. During
the financial crisis of 2007-08, the S&P 500 took months to
establish a bottom even after the volatility index plummeted.
Despite Monday's bounce, the S&P 500 .SPX remains nearly
20% - or $6 trillion in market value - short of its all-time
high in mid-February.
"It's a big stretch to try to extrapolate a reduction in the
number of cases into when we're going to be able to get back to
work," said Robert Pavlik, chief investment strategist at
SlateStone Wealth LLC in New York.
"People are still going to be very hesitant to go into
restaurants and bars."
S&P 500 companies are expected to enter an earnings
recession in 2020, with declines in profit in the first and
second quarters, according to IBES data from Refinitiv, as
demand evaporates across sectors including airlines, luxury
goods and industrials.
At 1:16 p.m. EDT, the Dow Jones Industrial Average .DJI
was up 1,196.52 points, or 5.68%, at 22,249.05, the S&P 500
.SPX was up 139.72 points, or 5.61%, at 2,628.37.
The Nasdaq Composite .IXIC was up 410.13 points, or 5.56%,
at 7,783.22.
Versace owner Capri Holdings CPRI.N surged 28% after
saying it expects to open its stores after June 1 and that it
would furlough all its 7,000 employees in North America.
Video conferencing app Zoom ZM.O fell 6.5% on concerns
over its data privacy practices and increased competition from
deep-pocketed rivals. Advancing issues outnumbered decliners by a 9.45-to-1 ratio
on the NYSE and by a 6.01-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and no new low,
while the Nasdaq recorded six new highs and 23 new lows.