US STOCKS-S&P 500 set to recoup $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
* Trump says coronavirus crisis "leveling-off" in some areas
* Volatility index falls to two-week low
* Indexes surge: Dow 5.51%, S&P 5.47%, Nasdaq 5.32%

(Updates to early morning)
By Uday Sampath Kumar and Shreyashi Sanyal
April 6 (Reuters) - The S&P 500 was on track to recoup about
$1 trillion in market value in a frantic rally on Monday after
New York, the biggest U.S. coronavirus hot spot, reported a fall
in daily deaths, raising hopes that the pandemic could level-off
soon.
All three main stock indexes jumped more than 4%, with gains
led by the defensive utilities .SPLRCU sector. Consumer
staples .SPLRCS and real estate .SPLRCR stocks - also
considered safe bets during times of volatility - rose between
2.7% and 6.1%.
The S&P 500 banking index .SPXBK jumped 5.2% 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 JP Morgan JPM.N
advanced between 4% and 6.4%, tracking Treasury yields. US/
"Seeing signs of stabilization in New York City is probably
the most important thing given the amount of capital that's
controlled through managers that live in the area," said Thomas
Hayes, managing member at Great Hill Capital LLC in New York.
"It's a tremendous relief for the market (but it's) not to
say that we're through the woods yet, because we're going to
have a tough week or two ahead."
U.S. officials have girded the country for a "peak death
week" from the pandemic, with the death toll now at more than
9,600. 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 - below its all-time high
in mid-February, as the novel coronavirus brought business
activity to a virtual halt and sparked mass layoffs.
"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 12:18 p.m. ET the Dow Jones Industrial Average .DJI was
up 1,159.52 points, or 5.51%, at 22,212.05, the S&P 500 .SPX
was up 136.22 points, or 5.47%, at 2,624.87 and the Nasdaq
Composite .IXIC was up 392.35 points, or 5.32%, at 7,765.44.
Versace owner Capri Holdings CPRI.N surged nearly 20%
after saying it would furlough all its 7,000 employees in North
America amid the coronavirus pandemic, as it expects to open its
stores only after June 1. Video conferencing app Zoom ZM.O fell more than 8% on
concerns over its data privacy practices and increased
competition from deep-pocketed rivals. Advancing issues outnumbered decliners nearly 10-to-1 on the
NYSE and 7-to-1 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 22 new lows.