U.S. stock markets jumped on Wednesday on hopeful signs about the coronavirus outbreak in the United States was close to a peak, with health insurers getting an additional lift from Bernie Sanders' decision to suspend his presidential campaign.
Stocks opened higher after President Donald Trump said Americans might be getting to the top of the "curve" in relation to the outbreak. New York Governor Andrew Cuomo said the state's efforts at social distancing were working in getting the virus under control in one of the biggest hotspots in the country.
"The key focus of 'peak.' That seems to be on every investor’s mind right now is when will coronavirus cases peak," said Eric Freedman, chief investment officer at U.S. Bank Wealth Management in North Carolina.
"At some point the economic considerations really start to materialize. Plus, what will that transmission mechanism be for the economy, meaning in what phase will the economy be restarted."
The Dow Jones Industrial Average rose 779.71 points, or 3.44%, to 23,433.57, the S&P 500 gained 90.57 points, or 3.41%, to 2,749.98 and the Nasdaq Composite added 203.64 points, or 2.58%, to 8,090.90.
After the worst March performance for the S&P 500 in decades, the benchmark index has bounced back by nearly 23% the past two weeks, although its main indicator of future volatility remains historically high.
Stocks gained an additional lift as the healthcare sector gained ground in the wake of Sanders' decision to drop his campaign for the White House. Sanders' embrace of a Medicare for All healthcare policy would have essentially abolished private insurance and had cast a shadow over healthcare stocks for months.
UnitedHealth Group Inc jumped 7.98% in the biggest boost to the Dow, while Anthem climbed 10.25%.
Even with the big gains in recent weeks, in part due to massive fiscal and monetary stimulus measures, the S&P 500 is still down almost 19% from its record high in mid-February, as measures to contain the virus brought the U.S. economy to a virtual halt.
The Federal Reserve on Wednesday released the minutes from last month's two emergency meetings. These showed officials grew increasingly concerned by the swiftness with which the pandemic was harming the U.S. economy and disrupting financial markets, prompting them to take "forceful action."
The energy sector, up 6.74%, was also a bright spot as one of the best performing sectors on the day, as WTI crude settled up more than 6% on hopes of a production cut by OPEC and its allies on Thursday.
Tesla Inc and Boeing Co supplier Spirit AeroSystems became the latest companies to furlough workers.
Spirit's shares jumped 16.01%, while Tesla edged up 0.62%.
Advancing issues outnumbered declining ones on the NYSE by a 6.89-to-1 ratio; on Nasdaq, a 4.87-to-1 ratio favored advancers.
The S&P 500 posted 3 new 52-week highs and no new lows; the Nasdaq Composite recorded 6 new highs and 21 new lows.
Volume on U.S. exchanges was 11.56 billion shares, compared to the 15.25 billion average for the full session over the last 20 trading days.
GLOBAL MARKETS
World equity markets surged and oil prices jumped on hopes the coronavirus pandemic is getting close to peaking and that more government stimulus measures could be on the way.
The Trump administration asked Congress for an additional $250 billion in emergency economic aid for small U.S. businesses reeling from the impact of the outbreak.
Broad gains in the United States helped push MSCI's index of global equities up 2.05% after a rally in Japan and modest declines in Europe.
"After the market rallying, we are having some consolidation as we are in a bottoming process, and you cannot have a V-shaped recovery," said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners. "Trading is between 2,200 to 2,800 on the S&P 500 at the moment and we will stick to that for the time being as we are in recovery phase."
U.S. gains helped bolster other world markets after euro zone finance ministers failed to agree during all-night talks on more support for their coronavirus-hit economies. Eurogroup chairman Mario Centeno said on Wednesday he was suspending the discussions until Thursday.
France has officially registered more than 10,000 deaths from coronavirus infections, the fourth country to cross that threshold after Italy, Spain and the United States.
Hospitalizations for COVID-19, the respiratory disease caused by the new coronavirus, seemed to be leveling off in New York state, but deaths across the United States jumped on Tuesday by a record of more than 1,800.
Wuhan, the Chinese city where the new coronavirus emerged, ended its more-than two-month lockdown on Wednesday, but new imported cases in the far northern province of Heilongjiang surged to a daily high of 25.
Investors edged out of U.S. Treasuries, which have rallied to record-low yields over the last month. Benchmark 10-year notes last fell 5/32 in price to yield 0.75%, from 0.734% late on Tuesday.
"While the virus' curve is flattening, the economic effects of the corona crisis will linger for years in our view," Commonwealth Bank of Australia economist Joseph Capurso said in a note.
"Economies will take time to re-open, some businesses will not re-open, and unemployment will take years to return to levels reported at the end of 2019."
Oil prices rose ahead of a meeting on Thursday between OPEC members and allied producers that traders hope could lead to output cuts to shore up prices.
Brent crude added 5.6% to $33.2567 per barrel after falling 3.6% on Tuesday. U.S. West Texas Intermediate (WTI) crude rose 9.9% to $25.98 a barrel.
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