Gains for the Dow firmed midday Monday, supported by shares of health-care related companies like Johnson & Johnson and UnitedHealth Group, as investors assessed efforts to slow the spread of the COVID-19 pandemic and cushion the economy against the impact of a near lockdown of activity across much of the U.S.
What are major indexes doing?
The Dow Jones Industrial Average
DJIA, +2.15%
gained 482 points, or 2.2%, to about 22,119, after a brief morning dip into negative territory. The S&P 500
SPX, +2.53%
climbed 64 points, or 2.5%, to 2,578. The Nasdaq Composite Index
COMP, +2.90%
rose 219 points, or 2.9%, to trade near 7,722.
The benchmark S&P 500 remains on track for its worst month since October 2008, but stocks bounced sharply last week. The Dow booked a 12.8% weekly advance, its strongest since 1938, while the S&P 500 rose 10.3% for its biggest such jump since 2008. The Nasdaq Composite’s 9.1% weekly rise was the biggest since March 2009.
What’s driving the market?
Investors remain focused on the growing number of COVID-19 cases and deaths. President Donald Trump, in a Sunday evening news briefing, said he had extended social-distancing guidelines through April 30. Trump had previously indicated a desire to begin lifting restrictions by Easter Sunday, on April 12.
Trump said the death rate was likely to peak in two weeks and that the U.S. would be “well on our way to recovery” by early June.
Some analysts said Trump’s decision to back away from an April 12 target for reopening the economy helped to stabilize investor sentiment. Trump’s “radical change in tone” showed the president is now taking the crisis seriously and was poised to listen to scientists on how to deal with the pandemic, said Boris Schlossberg, managing director of BK Asset Management, in a note.
“Investors seemed pacified by the fact that with scientists in control of policy the COVID-19 quarantine could have a clear definable timeline and effective plan of eradication rather than be subject to rolling waves of infection that could paralyze the U.S. economy for months,” he said.
Worldwide, there are now 724,945 cases of COVID-19 and at least 34,041 people have died, according to aggregated data from Johns Hopkins University. The U.S now has the most number of cases, with 143,055 infections and 2,513 deaths.
Earlier Sunday, Dr. Anthony Fauci, the government’s top U.S. infectious disease expert, said U.S. deaths could total between 100,000 to 200,000.
Stocks were lifted last week as U.S. lawmakers put together and passed a $2 trillion stimulus package aimed at cushioning the blow of the pandemic. The Federal Reserve and global central banks have also responded with an aggressive array of monetary policy measures aimed at boosting the economy and working to overcome disruptions in credit markets that had added to turmoil across asset classes.
Still, the rising number of infections and deaths and historically ugly economic data in coming weeks will likely make it difficult for stocks to sustain rallies, Schlossberg and other analysts said, even as investors debate whether stocks can defend more-than-three-year lows established last Monday before the market’s bounce.
Economic data in the week ahead may not fully capture the impact of the pandemic, which has led to a near shutdown of economic activity in the U.S. and much of the world. On Monday, the National Association of Realtors said pending home sales jumped 2.4% in February, and were up 9.4% year over year.
But more recent releases point to the coming economic distress. The Dallas Fed’s manufacturing index in March fell to an all-time low of minus 70 as factory operators said the coronavirus had increased uncertainty, hurt sales and disrupted supply chains.
Economic Preview: The U.S. is sinking into recession, but the full scope of the damage won’t be apparent right away
Which companies are in focus?
- Shares of Cal-Maine Foods Inc.
CALM, -1.47%
were down about 3% after the egg producer delivered fiscal third-quarter earnings that beat estimates. - Johnson & Johnson
JNJ, +7.68%
shares surged more than 8% after the company said it had identified a lead candidate in its efforts to develop a COVID-19 vaccine. UnitedHealth Group Inc.
UNH, +2.58%
shares also were climbing, helping 3%. - Shares of Regeneron Pharmaceuticals Inc.
REGN, +5.52%
rose 5.3%, while American depositary receipts for Sanofi SA
SNY, +4.81%
was up 5.4%% after the companies said Monday that the first patient in a global clinical trial testing Kevzara as a therapy for patients hospitalized with severe cases of COVID-19 had been treated. - Shares of major oil company Chevron Corp.
CVX, +4.09%
and aeronautics Boeing Co.
BA, -8.24%
were dragging the blue-chip Dow index lower.
How are other markets trading?
In bond markets, the yield on the 10-year U.S. Treasury note
TMUBMUSD10Y, -8.06%
tumbled 10 basis points to 0.63%. Bond prices move in the opposite direction of yields.
Crude oil continued to trade at depressed levels, with May futures for West Texas Intermediate
CLK20, -5.49%
down $1.25 to $20.26 a barrel on the New York Mercantile Exchange trading. In precious metals, April gold
GCJ20, -0.37%
was down fractionally at $1,622.70 an ounce.
The Stoxx Europe 600
SXXP, +1.28%
rose 1.3%, while the FTSE 100
UKX, +0.97%
slid more than 5%.
In Asia overnight, stocks ended mostly lower, with the China’s CSI 300
000300, -0.97%
sliding 1%, and Japan’s Nikkei 225
NIK, -1.57%
tumbling 1.6%.
Source : MTV
