BOSTON (CN) — Averse to putting away their rose-colored glasses, investors who gulped down good news this morning on the remdesivir drug trial chased the elixir this afternoon with a promise of Congress replenishing the small business loan program that ran dry this week.
The Dow Jones Industrial Average was up 704.81 points, or 2.99%. The S&P 500 increased 75.01 points, or 2.68%, and the Nasdaq was up 117.78 points, or 1.38%.
Asian and European markets also rallied, with both the Nikkei 225 and the FTSE 100 up around 3%. Oil fell more than 8%.
The market started strong this morning on news that a Gilead drug showed promise in treating Covid-19. Remdesivir was used on 125 patients in two Phase 3 clinical trials by University of Chicago Medicine researchers and produced rapid recoveries in the vast majority of cases, even severe ones. Almost all patients were discharged in less than a week.
Shares of Gilead Sciences Inc. soared 9.73% on the news.
On the political front, Senate Minority Leader Chuck Schumer allayed concerns over the government’s $349 billion loan program for small business that ran out of money a day earlier.
“We’ve had constructive talks,” the New York Democrat said. “They’re going to continue through the weekend and I don’t see any reason why we can’t come to an agreement soon.”
Another part of Congress’ $2 trillion relief package, a forbearance program for government-backed mortgages, has now been taken advantage of by almost 3 million homeowners, accounting for 5.5% of all mortgages.
Walmart announced that it had hired 150,000 new employees to keep up with coronavirus-related demand and planned to hire 50,000 more.
Investors were also digesting President Donald Trump’s plan to restart the economy, which involves a phased-in reopening beginning with areas with low infection rates and with substantial latitude given to governors.
New York Governor Andrew Cuomo was cautious but stressed the need to reopen. “Don’t pass the buck without passing the bucks,” Cuomo said Friday in a message to the president. “Is there any funding so I can do these things that you want us to do? No.”
The state is still experiencing about 2,000 hospitalizations and 600 to 800 deaths every day, he added.
Despite big gains today and positive news on the pandemic, Goldman Sachs took a pessimistic outlook on the stock market. “Our view is that the risk in the short term is still on the downside,” said Peter Oppenheimer, the firm’s chief global equity strategist, 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.”
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