Optimism over COVID-19 drug, Fed stimulus boosts Dow 2.2%

Optimism over COVID-19 drug, Fed stimulus boosts Dow 2.2%

The Wall Street sign
FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City. REUTERS/Carlo Allegri

NEW YORK: Wall Street stocks ended a bullish session sharply higher on Wednesday (Apr 29) on hopes of continued Federal Reserve stimulus and positive signs about a coronavirus treatment under development.

The Dow Jones Industrial Average finished up 532.31 points (2.21 per cent) at 24,633.86, while the broad-based S&P 500 gained 76.12 points (2.66 per cent) to 2,939.51.

Meanwhile, the tech-rich Nasdaq Composite Index jumped 306.98 points (3.57 per cent) to 8,914.71.

The heady session came after government data showed the US economy shrank by a whopping 4.8 per cent, the biggest decline in 12 years and a harbinger of what are expected to be even worse results in the second quarter.

READ: Federal Reserve leaves rates near zero, sees COVID-19 risks lingering

But the market has been cheered by the Fed's muscular response to the crisis, said Art Hogan, chief market strategist at National Securities, and hopes have been raised by the economic comeback in China and other markets that have faced COVID-19 outbreaks.

"Investors are sensing that there's an end to it," Hogan said. "The market is looking ahead to the fourth quarter and thinking it's going to be better than the second quarter."

The Fed had already unveiled a broad slate of programmes, including some for the first time.

Chair Jerome Powell said the Fed is "committed to using our full range of tools to support the economy."

The market also got a boost from comments from top government scientist Anthony Fauci and Gilead Sciences indicating promising clinical trials of the company's treatment for COVID-19.

Remdesivir has a "clear-cut" effect in helping COVID-19 patients recover, Fauci said Wednesday, hailing it as proof that a drug can block the coronavirus.

READ: US says Remdesivir shows 'clear-cut' effect in treating COVID-19 patients

Shares of Gilead jumped 5.7 per cent.

Google parent Alphabet surged 8.7 per cent as the company's results outshone dim earnings expectations.

Overall ad revenues for Google rose 10 per cent for the quarter even as the pandemic worsened in March.

The results lent momentum to Apple, Amazon and other tech giants that are set to report results in the coming days and won big gains Wednesday.

Boeing jumped 6.0 per cent despite reporting a US$641 million loss as the company announced a plan to cut its workforce by 10 per cent and expressed confidence it had sufficient liquidity to weather a deep downturn in its business due to coronavirus shutdowns.

READ: Boeing to cut staff by 10% amid coronavirus pandemic

Source: AFP/de

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