US market heads to weakest quarter since 2008

US stocks opened down Tuesday, but the modest decline was in sharp contrast to wild swings earlier this month. Nevertheless, the market is headed for the weakest quarter since the 2008 financial crisis sparked by the collapse of the subprime mortgage market.

Earlier this year, investors were optimistic as the US and China moved closer to a trade agreement. The US Federal Reserve held interest rates steady in anticipation of a strong economy.

Then the coronavirus hit, sending the world economy into a tailspin as factories closed, unemployment rose and consumer spending fell.

In early trading Tuesday the Dow Jones Industrial Average fell about 251.96 points, or 1.10 percent. The S&P 500 lost 33.66 points, or 1.28 percent. The Nasdaq Composite slid 58.34 points, of 0.76 percent.

On Monday, the Dow climbed 690.70 points, or 3.19 percent, led by an 8 percent jump in Johnson & Johnson after it announced a possible vaccine for the coronavirus. The S&P 500 rose 85.18 points, or 3.35 percent.

There are signs that China's economy is rebounding as production resumes after a near total shutdown due to the coronavirus outbreak, also called COVID-19.

"China has shown signs already that its economy may be picking back up," Lee Hardman, a currency analyst at MUFG Bank in London, told The Wall Street Journal. "It's leading the way and showing that the same could be achieved in other major economies if the virus is kept under control. Equity markets have stabilized over the last week in response to the powerful policy actions from central banks and governments."

The Morgan Stanley Capital Index, a measure of about 1600 stocks in 23 developed nations worldwide, has dropped 21.3 percent in dollar terms since the start of 2020, putting it on track for the worse quarter since December 2008 following the collapse of the subprime mortgage market. The second quarter begins Wednesday.

"I think the market has established some type of bottom," Tom Lee, head of research at Fundstrat Global Advisors, told CNBC.

Oil prices rallied Tuesday after hitting 18-year lows on Monday. West Texas Intermediate crude, the gauge of US prices, rallied about 4.43 percent to $20.99 a barrel. Brent crude, the worldwide benchmark, rose 1.89 percent to about $26.93 a barrel. The price of oil is viewed as an indicator of future economic activity.