In addition to news on remdesivir, investors were quick to gobble up Trump’s plan for a phased-in reopening of the economy.
BOSTON (CN) — Stocks rose strongly at the open Friday after President Donald Trump offered a plan to open up the economy and a Gilead clinical trial showed promise of its new drug treating Covid-19.
The Dow Jones Industrial Average was up well over 500 points. The S&P 500 increased over 50 points and the Nasdaq was up over 100 points.
Asian and European markets also rallied, with both the Nikkei 225 and the FTSE 100 up around 3%.
The Gilead antiviral remdesivir was used on 125 Covid patients in two Phase 3 clinical trials by University of Chicago Medicine researchers. The drug produced rapid recoveries in the vast majority of cases, even severe ones, and almost all patients were discharged in less than a week. The results were first reported by STAT News.
“An effective treatment is a huge deal and would create a path to open the economy and resume normal social activities way sooner than a vaccine,” Tom Lee, head of research at Fundstrat Global Advisors, told reporters.
“A treatment is safer and more scalable because it is only given to people who need to be treated,” he noted.
Shares of Gilead Sciences Inc. jumped in premarket trading.
Meanwhile, French drug company Sanofi could produce up to 600 million doses of its coronavirus vaccine next year if it gets regulatory approval, CEO Paul Hudson told CNBC.
Trump’s plan to restart the economy involves a phased-in reopening beginning with areas with low infection rates and with substantial latitude given to governors. Different businesses will be expected to reopen at different times and with different restrictions in place.
Nevertheless, “we want to get it back very, very quickly. And that’s what’s going to happen,” Trump said. “I believe it will boom.”
Despite the positive news, not everyone thinks the trouble is over for the market. “Our view is that the risk in the short term is still on the downside,” said Peter Oppenheimer, chief global equity strategist at Goldman Sachs, during a presentation for journalists.
“I think the rally that we’ve seen, which in many markets has been 25% or so from the low, is probably too rapid given the near-term prospects that we see for the economic and profit data,” he added.
Goldman downgraded Apple Inc. to a “sell” rating, saying the company would have trouble marketing high-priced phones “as consumers look to economize similar to what we have seen in prior downturns.”
Major earnings reports in the morning were positive. State Street Bank beat estimates with revenue of $3.1 billion, up 5%, and earnings per share of $1.62, up 37%.
Analysts had been expecting $2.9 billion and $1.35 per share.
The bank said that “unfavorable equity markets” were offset by “higher FX trading services driven by higher than usual FX volume and high market volatility.”
Proctor & Gamble apparently benefited from consumers stocking up on Charmin bathroom tissue and other products. The company reported net quarterly sales of $17.2 billion, up 5% over the previous year, and earnings of $1.12 per share, up 8%. The results were more or less in line with analysts’ estimates.
The company also said it would raise its quarterly dividend by 6%, an outlier in a period in which many companies have been reducing or eliminating their dividends.
P&G revised its guidance for the next quarter slightly downward, however, to reflect what it called “headwinds” from foreign exchange rates.
The consumer products giant bucked the recent trend toward eliminating quarterly earnings guidance altogether in light of the uncertainty cause by the pandemic. So far, 86 out of the Fortune 500 companies have suspended their earnings guidance, according to a JPMorgan note to its clients, including Abbott Labs, ConocoPhillips and Bed Bath & Beyond just this week.