Markets wrap: Stocks extend weekly rally on U.S. reopening plan
Stocks extended their weekly rally as investors speculated the American economy would soon begin to emerge from a lockdown amid a glimmer of hope in the race to find a coronavirus treatment.
The S&P 500 posted a second week of gains -- the longest run since mid-February -- after the U.S. government issued guidelines toward restarting the economy. Gilead Sciences Inc. soared after a report that a group of patients were "seeing rapid recoveries in fever and respiratory symptoms." Meanwhile, Apple Inc. sank after Goldman Sachs recommended selling the shares. Oil traded near $18 a barrel. Treasuries fell.
Some other corporate highlights:
- Boeing Co. plans to restart jetliner manufacturing in the Seattle area next week.
- Procter & Gamble Co.'s organic sales rose 6% as the coronavirus pandemic prompted panic-buying of household staples.
- Schlumberger Ltd. reduced its dividend for the first time in more than 40 years amid a historic crude market crash.
- Ford Motor Co. is taking its first drive through the high-yield market in years, looking to shore up liquidity after reporting one of its largest ever quarterly losses.
The week ended on an upbeat note for stocks after the White House issued guidelines for states to consider as they decide whether to relax stay-at-home orders and other social-distancing measures. The government is under pressure, with 22 million Americans applying for unemployment benefits in a month, erasing a decade worth of job creation. Meanwhile, China pledged stronger policies, including rate cuts, after the pandemic pushed the economy into its first contraction in decades.
"The market is fueled by hope and optimism - hope for a vaccination and optimism around reopening the economy," Mike Loewengart, managing director of investment strategy at E*Trade Financial, noted. "That said, these are relatively fragile indicators. There is still plenty of uncertainty in the near term."
The rally on Friday showed there's an "enormous amount of cash on sidelines, there's an enormous amount of desire for people to get invested and participate in the recovery," said Mike Swell, co-head of global portfolio management at Goldman Sachs Asset Management.
In fact, weekly flow data from Bank of America Corp. and EPFR Global highlighted a clear investor preference for money-market funds. Assets under management in this category have swelled to $4.5 trillion following seven week of inflows that added $877 billion to the cash pile.
These are some of the main moves in markets:
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- The S&P 500 climbed 2.7% at 4 p.m. New York time.
- The Stoxx Europe 600 index increased 2.6%.
- The MSCI Asia Pacific index gained 2%.
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- The Bloomberg Dollar Spot index dipped 0.5%.
- The euro advanced 0.3% to $1.0868.
- The Japanese yen strengthened 0.3% to 107.60 per dollar.
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- The yield on 10-year Treasuries increased two basis points to 0.65%.
- Germany's 10-year yield advanced less than one basis point to -0.47%.
- Britain's 10-year yield climbed less than one basis point to 0.304%.
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- The Bloomberg Commodity index added 0.1%.