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S&P 500 set to recover $1 trillion in value as virus deaths slow

Published 04/06/2020, 05:54 AM
Updated 04/06/2020, 02:16 PM
© Reuters. A man crosses a nearly deserted Nassau street in front of the New York Stock Exchange (NYSE) in the financial district of lower Manhattan in New York

By Uday Sampath Kumar and Shreyashi Sanyal

(Reuters) - The S&P 500 was on track to recover about $1 trillion in market value in a furious rally on Monday after a drop in the daily death toll in New York, the country's biggest coronavirus hot spot, raised hopes that the pandemic could level off soon.

All three main stock indexes jumped more than 5%, with the blue-chip Dow Industrials adding 1,200 points. Defensive utilities (SPLRCU) sector led with big gains, while consumer staples (SPLRCS) and real estate <.SPLRCR> - also considered safe bets during times of volatility - rose between 3% and 8%.

The S&P 500 banking index <.SPXBK> jumped 7.2% and was set for its best day in more than a week. Bank of America (N:BAC), Citigroup (N:C), Wells Fargo (N:WFC) and JPMorgan (N:JPM) advanced between 5.8% and 8.8%, tracking Treasury yields. [US/]

"All the market cares about right now is the virus and any positive event will see some buyers coming in," said Dennis Dick, proprietary trader, at Bright Trading LLC in Las Vegas.

"With New York City numbers getting better on the weekend, people are happy that we may be closer to the top of the peak than we thought."

Still, U.S. officials have girded the country for a "peak death week" from the pandemic, with the death toll topping 10,000.

Wall Street's fear gauge (VIX) fell to its lowest in two weeks, but analysts cautioned against calling a bottom. During the financial crisis of 2007-08, the S&P 500 took months to establish a bottom even after the volatility index plummeted.

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Despite Monday's bounce, the S&P 500 (SPX) remains nearly 20% - or $6 trillion in market value - short of its all-time high in mid-February.

"It's a big stretch to try to extrapolate a reduction in the number of cases into when we're going to be able to get back to work," said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.

"People are still going to be very hesitant to go into restaurants and bars."

S&P 500 companies are expected to enter an earnings recession in 2020, with declines in profit in the first and second quarters, according to IBES data from Refinitiv, as demand evaporates across sectors including airlines, luxury goods and industrials.

At 1:16 p.m. EDT, the Dow Jones Industrial Average (DJI) was up 1,196.52 points, or 5.68%, at 22,249.05, the S&P 500 (SPX) was up 139.72 points, or 5.61%, at 2,628.37.

The Nasdaq Composite (IXIC) was up 410.13 points, or 5.56%, at 7,783.22.

Versace owner Capri Holdings (N:CPRI) surged 28% after saying it expects to open its stores after June 1 and that it would furlough all its 7,000 employees in North America.

Video conferencing app Zoom (O:ZM) fell 6.5% on concerns over its data privacy practices and increased competition from deep-pocketed rivals.

Advancing issues outnumbered decliners by a 9.45-to-1 ratio on the NYSE and by a 6.01-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded six new highs and 23 new lows.

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Latest comments

drop in numbers is just a fake news ( by donald trump)
is something like if they have cancer and coronavirus and dies say it was cancer's fault
Watching wuhan closely right now. What does the headline, “2nd wave in wuhan” do for the market? Anybody else see the pictures of large gatherings and cringe?
Yeah, cringe and a big “face palm”. Along with how heavily they’re lying about the numbers, it seems to be a given that they will have a massive 2nd wave.
circuit breaker if market goes down 5%, but no circuit breaker if it goes up 6%, this market is a joke
Lol let it ride up and get your shorts in
so now store closures and ballistic unemployment are good news .... ROFLOL
&quot;Versace owner Capri Holdings (N:CPRI) surged nearly 20% after saying it would furlough all its 7,000 employees in North America amid the coronavirus pandemic, as it expects to open its stores only after June 1.&quot; SURGED 20%!!! LOL LOL LOL
Cutting labor costs always seems to be good news to investors
LOL!
Trillion here today, trillion gone tomorrrow.
Coordinated effort of global central banks and political leaders to inject vast amounts of cash into global markets and greatly under report virus spread numbers for ONE DAY! We are all still on lockdown.  We will still see depression level economic data released on a daily basis for the next few months.  And all the bulls can do is point to the idea that “central banks have our backs” as an investment strategy.  This market has lost touch with reality.  People are no longer trading on fundamentals and corporate profits but on the hopes that communist/socialist central bank policies will keep the equity bubble inflated.  But for how much longer?
Reality doesn't matter, all that matters is how the market interprets it. Today, as far as the market is concerned, the pandemic is over and oil was yesterday's news. Tomorrow, who knows?
How is your opinion tomorrow indian stock market
flip a coin. heads it's up, tails it's down. that's just as accurate as any &quot;professional&quot; analysis.
 At leat ramdomness make sense half of the time !
so a pandemic potential slowdown rallies the markets yet most businesses are closed with millions not working or producing anything and unemployment at historic record levels. clearly is the FED pumping $$ into the stock market to avoid a total collapse. a rigged economy.
Because test kits are scarce cause of covid 19 death cannot be noted on the death certificate. Very convenient for the largest cover up of all time.
If you want to be safe go to the White House. They have their own ventilators and testing kits while doctors and nurses go without fighting covid 19.
Markets rallying on a Trump hail Mary is the dumbest thing, all rationale goes out the window
Learn how to chart and do proper technical analysis and you won't have to guess you'll make money each day in the market and we'll have no need to complain
Got it! Adding short delta to portfolio
Ok, so looks that as usual the chip munk is wrong again. He said very bad 2 weeks and right now the media is working again to lie that cases and death are less. Probably the virus will be defeated with propaganda,not science. The only certain thong is that the Fed, again, is nationalizing private debt, flooding markets with money and people are being squeeze and killed. American Dream.
Yes, Trump did say &quot;the next 2 weeks will be rough&quot;. And, the numbers are leveling off. Both statements can be true at the same time. It's the 2nd one that matters - thus we have a rally.
Why in the world is the market rallying *** 338k infected cases and 9600 deaths as of now and the market is rallying? No stimulus checks, people are still losing jobs, unemployment at its highest, Covid and 5G radio frequency deaths on the rise and the market is bullish? complete BS!!
People start realizing covid-19 actually killed far far less people than H1N1 influenza and other notorious disease pandemic combined.... which had no stimulus programs relatively less media attention back then.
if You are talking about flu, that is not true. In this moment globaly is on 5% wich is much more than flu. Covid19 is much more deadliest even with lockdowns and isolation. Try to imagine if we let the world goes normaly like there is no covid. Without vakcine and with all other things it would be milions of that.
and if You mean on ‘bird flu’ that comparation is even not important because It is not in same level. It is impossible to stop Covid. influenca is very easy to stop because You can get influenca from person who already show symptoms, not before like with covid. And that is a big difference like You can see. All world is lockdown and Trump would never do that. He would never lockdown USA, but he saw (to late) that Covid is very dangerous.
Seeing the mathematical models, there is no evidence whatsoever that there will be a slowdown in US cases
Slowdown?????????looooooooooool Market rally for what???  Japan expected to declare state of emergency over corona virus soon.  Chinese not testing at all and make up number everyday. South Korea fluctuate everyday Africa and South America and India has started  Europe got death toll too highest.   US is getting worse everyday.  Companies generates zero revenue right now. U.S. citizens do not have income and need $1200 paycheck from govt every month going forward.  Unemployment rate hit the highest there is no oil deal today.  loooooooooooool  Welcome to stock casino!
Doesn't say how many were tested. More? Less?
bad news might be good news tomorow. another month ****down is another stimulus
so from 700 deaths a day to 600 deaths a day on a one day time point... doesnt count for people dieing on the deathbed that will normalize the next day. false glimmer of hope in my opinion. they need at least three consecutive days with trend to make a statement like that.
Slowdown will continue as long as we keep the economy shut down.
That's all nice but it also means social distancing works...and must continue = economic pain. We need a vaccine.
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