· Wall Street rallies on promising coronavirus drug
U.S. stocks surged on Wednesday as hopes for an effective COVID-19 treatment prompted a broad rally and helped investors shrug off bleak GDP data and words of warning from U.S. Federal Reserve Chair Jerome Powell.
The Dow Jones Industrial Average .DJI rose 532.31 points, or 2.21%, to 24,633.86, the S&P 500 .SPX gained 76.12 points, or 2.66%, to 2,939.51 and the Nasdaq Composite .IXIC added 306.98 points, or 3.57%, to 8,914.71.
Big tech companies provided the biggest lift to the S&P 500 and the Nasdaq, and pushed all three major U.S. stock averages closer to their all-time highs reached in February.
Drugmaker Gilead Sciences Inc (GILD.O) announced that its drug remdesivir is showing promise as an effective COVID-19 treatment, giving a boost to the broader market and sending its shares up 5.7%.
The U.S. economy suffered its sharpest decline in 11 years, with first-quarter GDP contracting at a 4.8% quarterly annualized rate according to the Commerce Department, marking the end of the longest U.S. economic expansion on record.
Many believe the worst is yet to come.
At the conclusion of its two-day monetary policy meeting, the Fed left key interest rates near zero and Chair Jerome Powell warned the economy will drop at an “unprecedented rate” in the current quarter.
But Powell also said the economy will pick up as restrictions are lifted and vowed the central bank would continue to support the recovery.
· European stocks close higher after ‘positive’ coronavirus drug trials; Deutsche Bank up 12%
European markets closed higher on Wednesday after Gilead Sciences claimed it was seeing “positive data” from trials of its drug remdesivir as a coronavirus treatment.
The pan-European Stoxx 600 closed around 1.8% higher provisionally, with most sectors and major bourses in positive territory.
· Japan stocks jump more than 2% on hopes of coronavirus treatment; China’s manufacturing data ahead
Stocks in Asia rose in Thursday morning trade following positive developments overnight on a potential new treatment for Covid-19.
Stocks in Japan, which returned to trade following a Wednesday holiday, led gains regionally. The Nikkei 225 jumped 2.55% as shares of robot maker Fanuc soared about 5%. The Topix index also rose 1.94%.
In South Korea, the Kospi edged 0.7% higher. The S&P/ASX 200 in Australia also rose 0.78%.
Overall, the MSCI Asia ex-Japan index traded 0.28% higher.
Investors watched for market reaction to developments overnight regarding the use of Gilead Sciences’ antiviral drug remdesivir as a potential new treatment for Covid-19 patients.
Reference: CNBC, Reuters
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