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Stocks – Wall Street Surges as Powell Hints at More Stimulus

Stock MarketsApr 29, 2020 03:16PM ET
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© Reuters.

By Yasin Ebrahim 

Investing.com - Wall Street extended its gains on Wednesday on positive news about a potential therapy to treat Covid-19 patients and growing hopes of further stimulus ahead after Federal Reserve Chairman's Jerome Powell suggested the central bank and Congress will need to do more to keep to support an eventual economic recovery. 

The Dow Jones Industrial Average rose 2.41%, the S&P 500 added 2.88%, while the Nasdaq Composite gained 3.69%.

"It may well be the case that the economy will need more support from all of us if the recovery is to be a robust one," Powell said, following the Fed's indication it will keep its benchmark rate within a 0% to 0.25% range.

"The committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals," the Fed said Wednesday.    

Many have attributed the central bank’s efforts to prop up the economy to the recent surge in the broader market since the March 23 low.

Gilead Sciences (NASDAQ:GILD) said a clinical trial evaluating its drug remdesivir in coronavirus patients had met its primary goal, sending its shares nearly 7% higher.

“The study demonstrates the potential for some patients to be treated with a 5-day regimen, which could significantly expand the number of patients who could be treated with our current supply of remdesivir,” Gilead Chief Medical Officer Merdad Parsey said in a statement.

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said he was told data from the trial showed a “clear cut positive effect in diminishing time to recover.”

The positive news on the potential coronavirus treatment overshadowed data showing U.S. economic growth contracted at an annual rate of 4.8% in first quarter of the year.

FAANG stocks, meanwhile, clawed back some of their losses from a day earlier after Google-parent Alphabet (NASDAQ:GOOGL) reported earnings that were better than feared. Facebook (NASDAQ:FB), which is set to report after the closing bell, was up about 6%, while Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) were up more 2%.

Energy, meanwhile, also supported the broader market rally, underpinned by a jump in oil prices owing to a smaller-than-expected bid in weekly U.S. crude inventories.

On the earnings front, meanwhile, investors digested mixed quarterly results from corporates.

General Electric (NYSE:GE) was down 2% after reported quarterly revenue above forecasts, but earnings of 5 cents per share missed estimates of 8 cents a share.

Toymaker Hasbro (NASDAQ:HAS) reported quarterly results that just missed Wall Street estimates and warned it expected the coronavirus to hurt its sales of its toys and games in the second quarter.

Yum! Brands (NYSE:YUM) was down 1.7% after it reported that earnings plunged 68% from a year earlier, with same-store sales down 7% during the quarter as the Covid-19 pandemic forced many restaurants to shutter.

Stocks – Wall Street Surges as Powell Hints at More Stimulus
 

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Comments (9)
Get Sirius
Get Sirius Apr 29, 2020 3:12PM ET
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When the so so so many bad news start to be good for market?
Alex Gaitan
Alex Gaitan Apr 29, 2020 2:43PM ET
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We are going to crash so hard again that we will feel the pain for years ahead, BRACE YOURSELVES!! Complete Pump & Dump just like Bitcoin which by the way completely reflects the stock market, no pump in the stock market = no pump in bitcoin, im 100% sure!
Ayaz Iqbal
Ayaz Iqbal Apr 29, 2020 2:43PM ET
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Cant wait! Im going to short everything right now
Get Sirius
Get Sirius Apr 29, 2020 2:43PM ET
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Ayaz Iqbal You are happy because You don’t understand what kind of crash can be. I hope we will not see that because Your 100$ will worth 1$
steven gitt
steven gitt Apr 29, 2020 2:26PM ET
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and for the record, the damage to the economy is not from the virus, it is from the months the world kept people out of work and thousands of bankruptcies and 30m unemployed people
Geese Dude
Geese Dude Apr 29, 2020 2:26PM ET
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thank you captain obvious.
Ayaz Iqbal
Ayaz Iqbal Apr 29, 2020 2:26PM ET
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Dont lie
Ayaz Iqbal
Ayaz Iqbal Apr 29, 2020 2:26PM ET
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I thought it was due to the fed printing 10 trillion dollars hhhhhhh
steven gitt
steven gitt Apr 29, 2020 2:19PM ET
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so a disease with a 99.7% survival rate now has a multi-billion dollar company who has come up with a treatment that in small preliminary trial shows a possible 3% improvement in survival in primarily the non-working population demographics... and market is using this as an excuse to add another trillion of value to the economy?
ליעד אלקובי
ליעד אלקובי Apr 29, 2020 2:19PM ET
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survival rate is between 81% at worst and to 93% at best . https://www.worldometers.info/coronavirus/
Jan Buyle
Jan Buyle Apr 29, 2020 2:01PM ET
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Here is the real reason why the stock market rallys. Total capitalisation of US stock markets is 37 trillion. Fed balance sheet is negative -6.5 trillion due to corona. If you were questioning why stocks are rallying on the worst recession in a century, this is why: the Fed owns 20% of the complete US stock market already. Bought with money they printed out of thin air. Welcome in the Sovjet Union!
Dicky Setiawan
Dicky Setiawan Apr 29, 2020 2:01PM ET
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hahahaha
Get Sirius
Get Sirius Apr 29, 2020 2:01PM ET
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Dicky Setiawan it is not funny, it is true (except the part about SSSR)
Ann Onymous
Ann Onymous Apr 29, 2020 1:55PM ET
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From Gilead: "The study demonstrated that patients receiving a 10-day treatment course of remdesivir achieved similar improvement in clinical status compared with those taking a 5-day treatment course." It's scary that people are buying on the back of this news - a sure sign of greed overtaking rational thinking. They've already failed a clinical test, but this study just underlines that if you take an ineffective drug for 5 days it will achieve the same results as taking it for 10 days (i.e. it doesn't work)!
Ayaz Iqbal
Ayaz Iqbal Apr 29, 2020 1:55PM ET
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Don’t forget the permenant liver damage! Would have been better off injecting bleach
Paolo Sarvia
Paolo Sarvia Apr 29, 2020 1:53PM ET
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It's a Miracle... hahahaha!
Roman Cerny
Roman Cerny Apr 29, 2020 1:29PM ET
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Why should any American company ever act responsibly again? What's the point of good corporate governance & fiscal responsibility? The companies that leverages themselves to the moon, let their credit rating go to junk, did stock buybacks to hyperinflate their stock price, gave the C-Suite bloated bonuses regardless of performance, and live on constant cheap debt instead of good balance sheets are now being bailed out by infinite QE. Free money to cover your mistakes. Heads they win, tails you lose. Why would anyone ever run a good business ever again? Just cheat, scheme, pat yourself on the back, and when the market goes bust, throw your hands up and get bailed out later.
Danny Brasko
ThisIsAmerica Apr 29, 2020 1:23PM ET
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If I hear the word "hope" or "optimism" one more time on why the financial markets are rallying. I wish analysts would write more on the twilight zone fundamentals going on, and how bad the Fed has screwed  what was left of free market.
 
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