Wall Street finished at its highest level in weeks on Wednesday as investors assessed progress on treatment for COVID-19 and the Federal Reserve again pledged to use its policy tools to help limit the economic damage from business shutdowns intended to slow down the spread of the contagion.
That was after first-quarter economic growth plunged more than forecast – an annual rate of 4.8% for the three months to March in the first of three estimates from the government.
The Dow rose around 532.31 points, or 2.2%, at around 24,633.86, its highest level since March 10, the S&P 500 index jumped 76.12 points, or 2.66%, to end at 2,939.51, its highest close since March 6, while the Nasdaq Composite Index closed up 3.57% at 8,914.71 ahead of what was a solid result from Microsoft after the bell, as well a good figures from Tesla and Facebook.
The company’s quarterly results beat forecasts and the shares rose.
Facebook shares missed forecasts but the shares still rose in after-hours trading early Thursday.
Tesla shares rose after the battery and electric car maker revealed a surprise profit for the March quarter.
The solid day’s trading boosted overnight trading on the ASX 200 futures platform and there’s a gain of more than 60 points in prospect.
That was down from a gain of 84 points at 5.40 am Sydney time.
The Aussie dollar leaped past 65 US cents for the first time in more than a month, iron ore prices edged higher, gold staged a late bounce, and oil rose.
Helping set the stage for gains on the day was a host of data from Gilead Sciences which showed that its anti-malarial drug remdesivir helped in treating certain patients with COVID-19.
Meanwhile, the New York Times on Wednesday reported that the Food and Drug Administration is preparing to grant an emergency-use authorisation as early as Wednesday.
That news came after a series of data points from clinical trials were shared publicly, including promising results of a Gilead-sponsored trial, a positive preliminary data analysis from a National Institute of Allergy and Infectious Diseases study, and data from a Chinese clinical trial published in The Lancet which confirmed last week’s preliminary findings that the drug made no difference in a randomised trial. That’s a finding the company has rejected.
The US Federal Reserve kept interest rates at a range of 0% and 0.25% but said that it intends on doing whatever is necessary to help support an economy and market beleaguered by the viral outbreak.
That was an understandable stance given the sharper than forecast 4.8% annual fall in US economic growth in the three months to March, and forecasts for a fall of 25% to 30% for the current June quarter.
The fall had been forecast for the March quarter but market forecasts were around a fall of 3.9% to 4.1%.
As was expected consumer spending plunged, as did exports (and imports, which helped boost GDP), business investment fell sharply and business inventories as well.
The gains today for the ASX follow yesterday’s 80 point, 1.5% surge, to 5,393.4, led by the banks.
NAB and ANZ both rose more than 6%, Westpac up over 5%, and Commonwealth Bank up 4%. The ANZ surge came a day before it releases its half-year figures on Thursday morning.
