US stocks have closed higher boosted by a surge in Boeing shares, President Donald Trump’s plan to reopen the coronavirus-battered economy and hopes of a potential drug by Gilead to treat COVID-19.
The Nasdaq added 6.1 per cent for the week and registered its biggest two-week percentage gain since 2001.
Boeing shares soared nearly 15 per cent on plans to restart commercial jet production in Washington state after halting operations last month due to the COVID-19 pandemic.
Gilead Sciences Inc surged almost 10 per cent following a report that patients with severe symptoms of COVID-19, the respiratory disease caused by the coronavirus, had responded positively to its experimental drug remdesivir. The report cited partial data from a University of Chicago hospital, one 152 locations participating in the trial.
With no treatments or vaccines currently approved for the coronavirus, the news helped lift global equity markets. But Gilead said the totality of the data from the trial needed to be analysed, and it expected to report results from a study testing the drug in severe COVID-19 patients at the end of April.
“If you can ultimately get a powerful treatment in lieu of a vaccine in the next couple of months, that would be good for cyclical stocks, anything economically sensitive,” said R.J. Grant, head of trading at Keefe, Bruyette & Woods in New York. “If we can get some sort of back-to-normal in some way that the economy could start to function, the banks are going to rip,” he added.
The S&P 500 is up nearly 30 per cent from its March trough following a raft of global stimulus and hopes that the spread of the virus was nearing a peak in the United States.
However, the S&P remains about 15 per cent off its all-time high, and strategists have warned of a deep economic slump from the halt in business activity and layoffs.
Some US states are expected to begin announcing timetables for lifting restrictions. On Thursday, Trump unveiled guidelines for a staggered, three-stage process by states to lift restrictions on business and social life to curb the pandemic.
The Dow Jones Industrial Average rose 704.81 points, or 2.99 per cent, to 24,242.49, the S&P 500 gained 75.01 points, or 2.68 per cent, to 2,874.56 and the Nasdaq Composite added 117.78 points, or 1.38 per cent, to 8,650.14.
For the week, the Dow added 2.2 per cent and the S&P 500 rose three per cent.
The reopening guidelines “provide some hope and optimism for folks and the market and the whole economy. It’s a start,” said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas.
Bradshaw, who owns Boeing shares, said the planemaker’s news was positive as well. “I certainly haven’t given up on it,” he said.
Bank stocks recovered after four straight days of losses triggered by lenders’ reporting several billion dollars in reserves to cover potential loan defaults. The S&P 500 financial index ended up 5.6 per cent, while the S&P energy index jumped 10.4 per cent.
Apple Inc fell 1.4 per cent as Goldman Sachs downgraded the stock on expectations of a 36 per cent drop in iPhone shipments during the company’s fiscal third quarter due to coronavirus-related lockdowns.