(Reuters) – Wall Street bounced on Friday as Boeing said it would resume production of commercial jets, with investors also cheering President Donald Trump’s plan to reopen the economy and on hopes of a potential drug by Gilead Sciences to treat COVID-19.
FILE PHOTO: The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., April 13, 2020. REUTERS/Andrew Kelly
The U.S. planemaker’s shares (BA.N) soared 11.9% on plans to restart commercial aircraft production in Washington state after halting operations last month due to the coronavirus pandemic.
The S&P 500 .SPX has now regained about 30% from a March trough and is set for its third weekly gain in four following a raft of global stimulus and on hopes that statewide lockdowns would be eased as the outbreak showed signs of ebbing.
However, the index is still about 19% away from reclaiming its all-time high and analysts have warned of a deep economic slump, as a halt in business activity puts millions of Americans out of work.
“Expectations are very low and every time you get a bit of good news — even if there is skepticism attached to the Gilead drug and to the timeline of opening up different regions — it’s still better than anyone would have expected,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
Trump outlined a plan on Thursday to reopen U.S. states in a staggered, three-stage process, but the plan was a set of recommendations rather than orders, and left the decision largely up to state governors.
Gilead (GILD.O) surged 8.2% following a report that patients with severe symptoms of the disease had responded positively to its experimental drug remdesivir.
With no treatments or vaccines currently approved for the coronavirus, the news lifted global equity markets, but Gilead said the totality of the data from the trial needed to be analyzed and it expected to report results from a study in severe COVID-19 patients at the end of April.
“The anecdotal evidence out of Gilead’s Chicago trials for remdesivir are just that: anecdotal, even though they are part of a Phase 3 trial,” said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald in New York.
Bank stocks .SPXBK bounced back after four straight days of losses on reporting several billion dollars in reserves to cover potential loan defaults. Financial stocks .SPSY were the top boost to the S&P 500.
The risk-on sentiment pushed Wall Street’s fear gauge below 40 and sent safe-haven gold down almost 2%. [GOL/]
At 11:29 a.m. ET, the Dow Jones Industrial Average .DJI was up 307.68 points, or 1.31%, at 23,845.36, the S&P 500 .SPX was up 32.78 points, or 1.17%, at 2,832.33. The Nasdaq Composite .IXIC was up 20.09 points, or 0.24%, at 8,552.46.
Amazon.com Inc (AMZN.O) and Netflix Inc (NFLX.O) eased slightly from record highs after surging this week on strong demand for online streaming services and home delivery of goods.
Apple Inc (AAPL.O) fell 2.4% as Goldman Sachs downgraded the stock, expecting iPhone shipments to drop 36% during the third quarter due to coronavirus-related lockdowns.
The world’s top oilfield services provider Schlumberger NV (SLB.N) rose 6% even as it swung to a loss in the first quarter on $8.5 billion in asset writedowns and cut its dividend.
Advancing issues outnumbered decliners more than 5-to-1 on the NYSE and 3-to-1 on the Nasdaq.
The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded 25 new highs and six new lows.
Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Sagarika Jaisinghani and Shounak Dasgupta