Asian Morning: US Stocks Rally on Hopeful Virus Treatment

On Wednesday U.S. stocks posted a powerful rally of over 2%, as investors were encouraged by Gilead Sciences' promising trial test results for its coronavirus drug remdesivir...

Trading floor 2

On Wednesday U.S. stocks posted a powerful rally of over 2%, as investors were encouraged by Gilead Sciences' (GILD +5.7%) promising trial test results for its drug remdesivir in treating coronavirus patients. 

Sentiment was also boosted by the Federal Reserve's pledge to support the economy.

The Dow Jones Industrial Average jumped 532 points (+2.2%) to 24,633, the S&P 500 rose 76 points (+2.7%) to 2,939, and the Nasdaq 100 surged 305 points (+3.5%) to 8,982.

Source: GAIN Capital, TradingView

Energy (+7.35%), Media (+5.95%) and Software & Services (+4.59%) sectors performed the best.

Norwegian Cruise Line (NCLH +25.4%), Noble Energy (NBL +23.3%), Apache Corp (APA +22.3%) and Marathon Oil (MRO +17.2%) were the top gainers.

Boeing (BA +5.86%) swung to a first-quarter net loss of $641 million from a net income of $2.1 billion a year earlier. The Company announced plans to slash 10% of its workforce and scale back production. Meanwhile, S&P has lowered the Company's credit rating closer to junk (BBB-/A-3). 

In after-market hours, Facebook (FB +9.0%), Tesla (TSLA +9.9%) and Microsoft (MSFT +2.3%) showed gains.

On the technical side, about 25.2% (25.6% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 93.3% (91.9% in the prior session) were above their 20-day moving average.

U.S. official data showed that GDP shrank at an annualised rate of 4.8% on quarter in the first quarter (-4.0% expected).

As expected, the Federal Reserve kept its benchmark interest rates unchanged at 0.00%-0.25%. The central bank acknowledged that the coronavirus pandemic is posting a considerable risk to the medium-term outlook for the economy.

Later today, the U.S. Labor Department will report Initial Jobless Claims for the week ended April 25 (3.500 million expected).

March Personal Income (-1.5% on month expected), Personal Spending (-5.0% on month expected), and the Market News International's Chicago Business Barometer for April (37.7 expected) will also be reported.

European stocks kept trading on the upside. with the Stoxx Europe 600 Index adding 1.8%. Germany's DAX jumped 2.9%, the U.K.'s FTSE 100 rose 2.6%, and France's CAC was up 2.2%.

U.S. Treasury prices eased, as the benchmark 10-year U.S. Treasury yield stepped up 1.2 basis points to 0.622%.

Spot gold increased 3 dollars to $1,711 an ounce.

Oil prices rebounded on a brighter outlook for demand following worldwide easing of coronavirus-induced restrictions. U.S. WTI crude oil futures (June) surged 22.0% to $15.06 a barrel, and Brent crude oil futures were up 6.6% to $24.23 a barrel.

The U.S. Energy Information Administration reported that crude-oil stockpiles increased 9 million barrels last week, less than an addition of 11 million barrels expected. At the same time, U.S. Treasury Secretary Steven Mnuchin said the government could add millions of barrels of oil to its national reserves.

Build your confidence risk free

More from Indices

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.