Hope lifts Wall Street as stocks rally worldwide
Investors key on positive pandemic and economic news
NEW YORK — In Wall Street’s tug of war between hope and pessimism about the coronavirus pandemic, hope is pulling back. U.S. stocks joined a worldwide rally Friday and closed out their first back-toback weekly gain since the market began selling off two months ago.
The S&P 500 jumped 2.7% Friday, following up on even bigger gains in Europe and Asia, as investors latched onto several strands of hope about progress in the fight against the coronavirus. They included the White House’s release of guidelines for states to reopen their economies and a very early but encouraging report on a possible treatment for COVID-19.
The S&P 500 rose 75.01 points to 2,874.56. The Dow Jones Industrial Average jumped 704.81, or 3%, to 24,242.49, and the Nasdaq added 117.78, or 1.4%, to 8,650.14.
“There’s no clear path yet” on when the pandemic and the economic devastation it’s caused will end, said Lindsey Bell, chief investment strategist at Ally Invest.
That’s caused the stock market to cycle up, down and up again, sometimes in the same day, as it tries to set prices now for where corporate profits will be in the future.
Optimists have been more forceful recently as they point to infections leveling off in some hard-hit areas. That raises the possibility that parts of the economy could reopen, even if it’s not tomorrow, and an eventual pickup in profits. Optimists are willing to look through all the economic damage in the near term, which is being mitigated somewhat by massive aid from the Federal Reserve and the U.S. government.
“Just having that light at the end of the tunnel is what people really want to see,” said J.J. Kinahan, chief market strategist at TD Ameritrade.
Pessimists say the recent rally for stocks has been overdone and point to the severe pain shocking the health care system and the economy. They say conditions are unlikely to get back to anything approximating “normal” soon. Even the unprecedented aid from the Fed and Congress won’t be nearly enough for households and businesses to weather a protracted downturn.
“We’re trying to bridge from the current state to the aftermath, and that bridge is just not long enough,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.
Among the wisps of optimism that investors were focusing on Friday:
A news report cited early progress in a drug candidate for the virus. Analysts cautioned that the encouraging data were anecdotal, and they were hesitant to put too much stock in it. Shares of the company behind the candidate, Gilead Sciences, surged 9.7%.
Boeing said late Thursday it will resume production of passenger jets in Washington state next week. Its 14.7% surge was a big reason for the Dow’s climb Friday.
Treasury yields ticked higher but remain extremely low. The yield on the 10-year Treasury rose to 0.64% from 0.61% late Thursday, though it remains well below the 1.90% it was near at the start of the year.