U.S. Stocks Close Sharply Higher On Optimism About Coronavirus Treatment
Stocks moved sharply higher over the course of the trading day on Friday, adding to the gains posted in the previous session. With the continued upward move, the major averages reached their best closing levels in over a month.
The major averages saw further upside going into the close, ending the session near their highs of the day. The Dow soared 704.81 points or 3 percent to 24,242.49, the Nasdaq jumped 117.78 points or 1.4 percent to 8,650.14 and the S&P 500 spiked 75.01 points or 2.7 percent to 2,874.56.
For the week, the Nasdaq skyrocketed by 6.1 percent, while the S&P 500 and the Dow surged up by 3 percent and 2.2 percent, respectively.
The rally on Wall Street came following a report of promising early data related to a potential coronavirus treatment from Gilead Sciences (GILD). Shares of Gilead have moved sharply higher on the news.
Healthcare publication STAT News reported that the experimental Covid-19 treatment remdesivir is showing promise in a Chicago clinical trial.
Investors also seemed to be reacting positively to President Donald Trump’s plans for a gradual re-opening of the U.S. economy.
“We are not opening all at once, but one careful step at a time,” Trump said at the coronavirus task force press briefing Thursday as the White House outlined a three-phase approach to gradually bring back parts of public life.
Meanwhile, traders shrugged off a report from the Conference Board showing its index of leading U.S. economic indicators registered the largest decline in its 60-year history in the month of March.
The Conference Board said its leading economic index plunged by 6.7 percent in March after dipping by a revised 0.2 percent in February.
Economists had expected the index to plummet by 7.0 percent compared to the 0.1 percent uptick originally reported for the previous month.
“The unprecedented and sudden deterioration was broad based, with the largest negative contributions coming from initial claims for unemployment insurance and stock prices,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.
He added, “The sharp drop in the LEI reflects the sudden halting in business activity as a result of the global pandemic and suggests the US economy will be facing a very deep contraction.”
Energy stocks turned in some of the market’s best performances on the day despite a steep drop by the price of crude oil. Crude for May delivery tumbled $1.60 to $18.27 a barrel.
Reflecting the strength in the energy sector, the NYSE Arca Oil Index skyrocketed by 10.5 percent, the Philadelphia Oil Service Index soared by 7.7 percent and the NYSE Arca Natural Gas Index surged up by 7.3 percent.
Substantial strength was also visible among banking stocks, with the KBW Bank Index spiking by 8.4 percent after moving sharply lower over the past few sessions.
Biotechnology, chemical, and housing stocks also saw significant strength on the day, while gold stocks bucked the uptrend amid a sharp decrease by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index spiked by 3.2 percent, while China’s Shanghai Composite Index climbed by 0.7 percent.
The major European markets also showed substantial moves to the upside on the day. While the French CAC 40 Index surged up by 3.4 percent, the German DAX Index soared by 3.2 percent and the U.K.’s FTSE 100 Index jumped by 2.8 percent.
In the bond market, treasuries showed a lack of direction before coming under pressure going into the close. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.5 basis points to 0.654 percent.
News on the coronavirus front is likely to remain in focus next week, overshadowing reports on new and existing home sales, durable goods orders, and consumer sentiment.
Earnings news may also attract attention, with IBM Corp. (IBM), Coca-Cola (KO), Netflix (NFLX), AT&T (T), Intel (INTC), American Express (AXP) and Verizon (VZ) among a slew of companies due to report their quarterly results.
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