Dow gains as virus treatment hopes eclipse spiking US infections

Wall Street continues to cling to optimism even as Main Street’s most vulnerable teeter on economic brink.

Wall Street
A worker washes the sidewalk in front of a Wall Street subway station near the New York Stock Exchange in New York, United States, which registered a record high in new coronavirus cases for the third day in a row on Friday [File: Michael Nagle/Bloomberg]

Positive news on Friday from Gilead Sciences on its COVID-19 candidate treatment help offset fears on Wall Street of mounting infections in the United States. 

The Dow Jones Industrial Average ended the day up 369 points or 1.4 percent to finish at 26,075.3 while the S&P 500 – a proxy for the health of US retirement and college savings accounts – gained just over 1 percent. And once again, the big winner of the day was the tech-heavy Nasdaq Composite Index that jumped 69.69 points to finish at 10,617.44 – another record close for the tech-heavy index. 

For the week, the Dow gained 1 percent, the S&P 500 rose 1.8 percent and the Nasdaq vaulted 4 percent.

Gilead Sciences Inc. said on Friday that an analysis showed that patients treated with its COVID-19 candidate treatment drug remdesivir showed an improvement in clinical recovery and a 62 percent reduction in the risk of mortality compared with standard of care. But the company cautioned that rigorious clinical trials are still needed.

Share of Gilead closed up 2.1 percent.

As the US registered the largest single-day increase in new coronavirus cases globally for the second day in a row on Thursday, states are reversing their reopenings and, in some cases, ordering small and local businesses to shutter yet again – further threatening an already uneven economic recovery.

President Donald Trump, who insists that there are so many coronavirus cases because the US is doing the most testing, said that recent gains in the stock market show “people have a lot of confidence in what we are doing” and promised a positive outlook for the rest of 2020.

“We’re going to have a great third quarter, third quarter is going to be tremendous numbers, fourth quarter likewise. And next year, economically, will be one of the best years we have ever had,” Trump said at a Florida briefing on South American Drug Trafficking.

“But you will see the numbers starting to come out really really high in the third quarter. And you have already seen the record-breaking job numbers. NASDAQ just hit recently, about 12 record highs, 12 days record highs. And the other markets are right behind it. They will be hitting record also shortly,” Trump continued. 

A slew of economic data continues to point to an improving outlook as states reopen for business. The number of Americans filing for jobless benefits dropped to near a four-month low last week.

The S&P 500 has risen more than 40 percent from its March lows and stands about 8 percent below its record high hit in February. 

People have a lot of confidence in what we are doing.

by US President Donald Trump

Shares of Carnival Corp jumped 10.83 percent after the cruise line operator said it was planning to resume operations in a phased manner and would operate with a smaller fleet on its return.

Boeing stock gained 2.97 percent after Reuters News Agency reported that the aircraft maker is scrambling to shore up financing for the 737 MAX as it awaits regulatory approval for changes to the plane after the design was grounded following two fatal crashes.

Shares of Netflix Inc also rose 8 percent after Goldman Sachs hiked its price target on the video-streaming service.

Banks did well, too, with Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Goldman Sachs all climbing ahead of their financial results next week. 

But the fortunes of Wall Street and Main Street’s most vulnerable are sharply diverging. 

Eviction moratoriums and the addition to unemployment benefits are set to expire at the end of July, pushing millions of Americans, already struggling to pay their bills and get by, to the brink of economic calamity. Millions of renters are at risk of being kicked out of their homes.

“To mitigate the economic harm to workers, Congress should extend the across-the-board $600 increase in weekly unemployment benefits well past its expiration at the end of July,” Julia Wolfe, economic analyst at the think-tank Economic Policy Institute wrote in a note.

“If Congress does not extend these benefits through next year, it could cost us more than 5 million jobs and $500 million in personal income,” she warned.

Source: Al Jazeera