Dow jumps 700 points, lifting US stocks to second week of gains on hopeful coronavirus signs
Stocks gained for a second straight week on investor optimism over governments taking baby steps toward opening their economies and on early signs that science may be gaining on the coronavirus.
The Dow Jones industrial average surged 704 points on Friday to finish at 24,242, a 3 percent gain. The Dow got a big boost after aerospace giant Boeing announced it would resume manufacturing jetliners this Monday. Boeing shares were up 13 percent.
The Standard & Poor's 500 finished the day up 2.7 percent and Nasdaq composite climbed 1.4 percent. All 11 stock market sectors were up, with energy and financials leading the way. Oil company shares gained as the U.S. oil sector shuts down more than a third of its production due to rock-bottom oil prices.
Reports from a Chicago hospital late Thursday that an antiviral medicine appeared to successfully treat severe symptoms for coronavirus patients sent European and Asian markets higher and fed into Friday's gains in the U.S.
That last two weeks have seen a swarm of news around health companies seeking virus treatments and governments easing virus curbs. The result has been stocks bouncing way up from the March lows that had ended the 10-year bull market. The rally has come amidst three weeks of dismal economic numbers showing the pandemic has erased all U.S. job gains from the last decade. The virus continues to force tens of millions of Americans to stay home and disrupt entire industries.
President Donald Trump on Thursday released federal guidelines for a gradual return to normal in places with minimal coronavirus cases, even as health experts, business leaders and government officials say the nation's testing capacity around the virus needs to be significantly expanded to ensure public safety.
"There is also positive sentiment being generated by the White House's plan to begin slowly rolling back lockdown measures," said Kristina Hooper, global market strategist at Invesco. "It seems clear that, as of late, stocks have chosen to look through what is expected to be a dramatic drop in earnings, and forward to a resurgence in economic activity in the not-too-distant future."
In Europe, Britain's FTSE 100 popped 2.82 percent, the German DAX climbed 3.15 percent and the benchmark Stoxx 600 gained 2.4 percent. Asian stocks finished the day with Japan's Nikkei 225 up 3.15 percent, and Hong Kong's Hang Seng up 1.5 percent.
STAT news reported Thursday that severely ill coronavirus patients were responding well to remdesivir, a Gilead Sciences drug, at a Chicago hospital. The trial involved only 125 people and the preliminary results were not peer reviewed, but it was welcome news for investors looking for light at the end of the pandemic tunnel, and the economic recovery that will come with it. Gilead shares spiked 7.5 percent Friday afternoon.
On Friday, the University of Chicago Medicine emphasized that "partial data from an ongoing clinical trial is by definition incomplete and should never be used to draw conclusions about the safety or efficacy of a potential treatment that is under investigation."
"Drawing any conclusions at this point is premature and scientifically unsound," the institution said in a statement.
"Investors are looking past the economic abyss and accentuating the positives on the health care front," said Ed Yardeni, president of Yardeni Research.
Oil prices remain at an 18-year-low as airline travel, driving and manufacturing have slowed to a crawl. U.S. crude was selling near $18 a barrel Friday, a fraction of what oil producers need to make a profit. If prices remain depressed long term, many oil companies, suppliers and adjacent service industries will be gravely wounded, resulting in bankruptcies and potentially massive layoffs.
China said its economy contracted 6.8 percent during the first three months of the year amid its coronavirus shutdown. It also reported a significantly higher death toll in Wuhan, where the virus was first detected. As of April 16, 3,869 had died and 50,333 had been infected, according to a notification released by the Wuhan epidemic prevention and control center on April 17.
Last week, 5.2 million Americans filed unemployment claims, bringing the total to 22 million in the four weeks since President Trump declared a national emergency. The United States has not seen this level of job loss since the Great Depression.
On the earnings front, consumer staples bellwether Procter & Gamble reported a 10 percent jump in sales during the first quarter as Americans stored up everything from toilet paper to Pampers during the lockdown.
"Optimism about an effective treatment is driving prices higher," said Daniel P. Wiener, chairman of Adviser Investments, based in Newton, Massachusetts. "But it's still too early to get excited. We have a lot further to go before we can sound the all-clear."
