S&P 500 climbs above 2,900 as drug maker Gilead says trial for coronavirus treatment has met initial goal

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

Stocks traded sharply higher Wednesday as reports that a drug manufacturer’s clinical trial for a treatment to help patients recover more quickly from the COVID-19 disease helped to offset news of a plunge in U.S. first-quarter gross domestic product.

Investors will also look forward to the outcome of a two-day Federal Reserve policy meeting, as first-quarter corporate earnings continue to flow in.

What are major indexes doing?

The Dow Jones Industrial Average DJIA, 2.32% rose 492 points, or 2%, to 24,594, while the S&P 500 SPX, 2.72% was up 67 points, or 2.3%, at 2,930. The Nasdaq Composite COMP, 3.34% added 256 points, or 3%, to 8,863.

Stocks gave up early gains Tuesday to end lower, with the Dow snapping a four-day winning streak to close at 24,101.55, down 32.23 points, or 0.1%. The S&P 500 lost 15.09 points, or 0.5%, to close at 2,863.39, while the Nasdaq Composite settled at 8,607.73, down 122.43 points, or 1.4%.

What’s driving the market?

Gilead Sciences Inc.said Wednesday morning that a government-run clinical trial evaluating its experimental drug remdesivir in certain COVID-19 patients met the study’s main goal. The announcement stirred hopes that pharmaceutical companies were making progress toward a treatment of the COVID-19 disease, but investors are still awaiting details from the study.

The news helped to outweigh the bearish impact of a sharp slump in U.S. economic growth in the first quarter, gross domestic product shrinking by 4.8% on an annualized basis.

Economists surveyed by MarketWatch, on average, were looking for a 3.9% fall in GDP after a 2.1% expansion in the fourth quarter. The first-quarter decline is expected to be only a foretaste of the economic carnage caused by the pandemic lockdowns in the current quarter, but some investors are already looking into the future.

“The question is to what extent we get a rebound in Q3 as most everything should be open and hopefully we’ll get more good news from Gilead and other drug companies on therapeutics that could increase the confidence of people to reengage with businesses again via consumer spending,” said Peter Boockvar, chief investment officer at the Bleakley Advisory Group, in a note.

In other U.S. data, pending home sales fell to its lowest level since 2011.

The Fed will also draw some attention later Wednesday. Economists expect the Fed to reassure investors and the public that it will limit the largest economic downturn since the Great Depression.

But few analysts expect the central bank to take new action after a series of emergency measures since March in response to the coronavirus crisis. The Fed has cuts its policy interest rate to nearly zero, started an open-ended bond-buying program, and moved to backstop loans to Main Street to ensure financial markets continue to function.

The Fed will conclude its two-day meeting with a statement, due at 2 p.m. Eastern, followed a half-hour later by Chairman Jerome Powell’s virtual news conference.

Before Tuesday’s pullback in stocks, gains this week were attributed to optimism over efforts by European countries and some U.S. states to begin easing up on lockdowns aimed at slowing the spread of COVID-19, though worries linger that a push to lift restrictions too quickly could see the number of cases reaccelerate.

“Part of the reason the market has rallied so dramatically from its March lows is that investors are having an easier time seeing through the economic devastation in the short-term to how a recovery may develop,” said Michael Reynolds, investment strategy officer at Glenmede, in e-mailed comments.

The global case tally climbed to 3.13 million on Wednesday, according to data aggregated by Johns Hopkins University. The death toll rose to 217,555. At least 935,308 people have recovered. The U.S. has the highest case toll at 1.01 million and the highest death toll at 58,355.

Investors were sifting through another deluge of first-quarter earnings reports.

Which companies are in focus?
How are other markets trading?

Crude prices recovered slightly, but still remain at depressed levels. West Texas Intermediate oil for June delivery CLM20, 27.80% rose $4.13, or 33%, to $16.47 a barrel, on the New York Mercantile Exchange. Gold for June delivery GCM20, -0.41% fell $7.30, or 0.4%, to $1,714.90 an ounce.

The 10-year Treasury note yield TMUBMUSD10Y, 0.608% was down 1.8 basis points to 0.592%, Tradeweb data show. Bond prices move in the opposite direction of yields.

In overseas equities, the STOXX Europe 600 index SXXP, +1.75% rose 1.4%. China’s benchmark CSI 300 000300, +0.46% index and Hong Kong’s Hang Seng index HSI, +0.27% posted slight gains. Japanese exchanges were closed in observance of the Golden Week holiday.

Originally Published on MarketWatch

Home of Science
Follow me

- Advertisement -




The Sinking Dollar Won’t Help Emerging Currencies, Barclays Says

Emerging-market currencies will see little reprieve over time even as the reopening global economy eases investor fears and the U.S. dollar weakens, according to...

How we’ll deal with the mushrooming national debt

Congress has appropriated more than $3 trillion in coronavirus relief spending so far, as businesses shut down nationwide and millions of workers lose their...

8 ways to switch up your shelter-in-place routine and shake the boredom

This article is reprinted by permission from NerdWallet. As COVID-19 sparks closures, cancellations and stay-at-home orders, household stressors are piling up. On top of health concerns, lost incomes and lack...

Pretty Little Liars – Episode 7 Review

Pretty Little Liars - Episode 7 ReviewThe biggest secret of Pretty Little Liars is revealed in this episode! The girls learn that they...

China’s Yuan Joins Ranks of World’s Most Influential Currencies

When the offshore yuan matched its record low last week, it served notice that China’s exchange-rate fixing had returned as a key variable to...
Home of Science
Follow me