By Joe Wallace, Paul Vigna and Chong Koh Ping
U.S. stocks rose Wednesday on hopes of progress for a coronavirus treatment and as Federal Reserve Chairman Jerome Powell said the central bank is in no hurry to end its economic stimulus.
Major indexes opened sharply higher and maintained those gains through the closing bell. All 11 sectors of the S&P 500 rose, led by shares of beaten-down energy stocks.
The Dow Jones Industrial Average rose 532.31 points, or 2.2%, to 24633.86. The S&P 500 gained 76.12 points, or 2.7%, to 2939.51. The Nasdaq Composite jumped 306.98 points, or 3.6%, to 8914.71.
All three indexes have surged in April after a punishing selloff when the pandemic brought the economy to a near halt.
"The market is pricing in an economic rebound later in the year," said Michael Arone, chief investment strategist at State Street Global Advisors, pointing to sectors like energy and financials that are rebounding after suffering steep losses.
Sentiment was boosted Wednesday by news from Gilead Sciences that a clinical trial evaluating its drug remdesivir in coronavirus patients had concluded with a positive result. Gilead shares rose $4.47, or 5.7%, to $83.14.
The Gilead news, Mr. Arone said, may actually be the day's most important development. "This is a health problem that requires a health solution," he said, and the market is going to jump on any signals that a solution is nearer.
Energy stocks, up 7.4%, were the S&P 500's best-performing group. The sector has risen 33% in April, which would be its best month since at least 1994. It has climbed more than 18% over the past six sessions alone, helping to cut its losses for the year to 35%.
At the conclusion of its two-day policy meeting, the Federal Reserve didn't unveil any new programs, but the central bank did pledge lasting support for the economy.
After cutting interest rates to near zero in mid-March, the Fed began a torrent of bond-buying programs to stabilize markets, while offering support to other corners of the market to bolster the availability of credit. These measures have helped stocks stage a rapid recovery in the face of a deep recession.
"Let me just say we are going to not be in any hurry to withdraw these measures," Mr. Powell said. "We are going to wait until we are quite confident that the economy is well on the road to recovery" before backing off from support efforts.
Joseph Brusuelas, chief economist at consulting firm RSM, noted that the Fed didn't "point to an exit or end point on its accommodative policies."
"The Fed is prepared to engage in an open-ended period of policy innovation to support the years it's going to take the economy to dig out," he said.
Specifically, the Fed didn't "point to an exit or end point on its accommodative policies," he said. "The Fed is prepared to engage in an open-ended period of policy innovation to support the years it's going to take the economy to dig out."
But even an open-ended, multi-trillion-dollar rescue can't force a quick recovery, said Danielle DiMartino Booth, chief executive and chief strategist of research firm Quill Intelligence. "Clarity about the Fed's commitment to bail out markets cannot equate to households feeling confident or having adequate funds to resume their prior spending habits, " she said.
Data Wednesday showed that gross domestic product, a broad measure of the goods and services produced in an economy, fell 4.8% in the first quarter. The contraction is the steepest since the last recession.
In corporate news, shares of Alphabet climbed $109.59, or 8.9%, to $1,342.18 after Google's parent company posted strong results for the first quarter. Revenue rose 13% from a year before, adding to indications that Silicon Valley might weather the slowdown better than others in the corporate world.
General Electric shares fell 22 cents, or 3.2%, to $6.58 after the company said it was cutting $2 billion in costs to offset falling sales and profits. Boeing rose $7.70, or 5.9%, to $139 after the aircraft manufacturer said it planned to cut jetliner production and 10% of its workforce.
Oil markets remained volatile. June futures contracts for West Texas Intermediate, the main U.S. bellwether, rose 22% to $15.06 a barrel.
Among European equities, shares of major banks were among the best performers. The pan-European Stoxx Europe 600 rose 1.7%.
Asian stock benchmarks broadly rose. Australia's S&P/ASX 200 closed 1.5% higher, while the Shanghai Composite Index inched up 0.4%. Hong Kong's Hang Seng Index ticked up 0.3%. Japan's market was closed for a public holiday.
Write to Joe Wallace at Joe.Wallace@wsj.com, Paul Vigna at paul.vigna@wsj.com and Chong Koh Ping at chong.kohping@wsj.com
(END) Dow Jones Newswires
April 29, 2020 17:33 ET (21:33 GMT)
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April 30, 2020 at 04:33AM
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