The S&P 500 and Nasdaq topped out with new record highs Monday as the promise of a plasma therapy for Covid-19 helped U.S. markets rally.
MANHATTAN (CN) — News of an untested but government-approved therapy for coronavirus led two of the three major U.S. indices to reach new heights Monday.
The S&P 500, which had reclaimed all its coronavirus-related losses last week, again moved higher, closing at 3,431 points, a 1% increase for the day. The Nasdaq similarly gained 0.6% to settle at a new high point of 11,379 points.
The Dow Jones Industrial Average had the best daily performance — netting 378 points, or a 1.3% increase — but has yet to reclaim all of its losses since markets fell in the spring.
Wall Street was largely spurred by moves over the weekend by the Trump administration to authorize emergency use of blood plasma as a treatment for hospitalized coronavirus patients.
Food and Drug Administration officials say that convalescent plasma derived from patients who have recovered from Covid-19 infections has been used on at least 70,000 patients.
The therapy is very new and has not been fully vetted, though a study by the Mayo Clinic earlier this year found it could help some hospitalized patients.
President Trump has called the treatment a “powerful therapy” and “breakthrough,” but some scientists are skeptical about its efficacy. Further, some researchers are now worried that Covid-19 immunity is not permanent, with researchers reporting the first case of coronavirus reinfection on Monday.
Investors also were likely buoyed by comments on Monday by World Health Organization Director-General Tedros Adhanom Ghebreyesus that “there is a light at the end of the tunnel” regarding the deadly virus.
According to data compiled by Johns Hopkins University, more than 23 million have contracted Covid-19 worldwide, while roughly 809,000 have died. In the United States alone, 5.7 million have been confirmed infected while almost 177,000 have died.
The outlook isn’t entirely cheery, though. A survey by the National Association for Business Economics released Monday finds that most analysts expect another recession once the U.S. economy fully rights itself.
Of the 235 economists surveyed, 4 out 5 believe there is at least a 25% chance of a “double dip” recession, while almost two-thirds think the U.S. economy is still in a recession.
Economists are split, however, on how to handle the economy: 40% think Congress has not acted sufficiently with fiscal measures, and 37% think lawmakers have done an adequate job.
Finding common ground meanwhile when it comes to the Federal Reserve’s monetary policy, more than 75% of respondents said they found the central bank’s policies appropriate. A share this large has not held such a view since 2007.
Federal Reserve Chairman Jerome Powell will speak at the annual Jackson Hole Economic Policy Symposium later this week, during which he will give further insight into the Fed’s future actions and perhaps his thoughts about another downturn.
Another survey from the National Federation of Independent Business warns that 1 in 5small businesses may need to shutter their doors if economic conditions don’t improve over the next six months.
According to the NFIB’s survey of about 20,000 members, about another one-fifth of respondents say they can survive under current economic conditions for only another 7–12 months.
The future is bleak for many of the small businesses surveyed. More than half of respondents say it will take until 2021 for things to improve, while 20% say it will take until at least 2022.
“The health crisis is not impacting small businesses equally,” said Holly Wade, NFIB’s director of research and policy analysis. “Many of them still need more financial assistance just to keep their doors open and staff on payroll.”
Nearly half of respondents said they would apply or reapply for a second loan under the Paycheck Protection Program to keep afloat. About 4 in 5 respondents say they have used up their entire PPP loan.