TOPLINE
The stock market moved higher on Friday, reversing early losses, after positive coronavirus vaccine news helped offset growing investor concerns about a record number of new U.S. cases.
Stocks ticked higher after Gilead’s coronavirus treatment showed positive data.
Marcel Kusch/dpa/picture alliance via Getty Images
KEY FACTS
The Dow Jones Industrial Average was up 1.4%, nearly 400 points points, on Friday, while the S&P 500 rose 1% and the tech-heavy Nasdaq Composite gained 0.7%.
The Nasdaq rose to another new record high, boosted by sharp gains in big tech stocks like Amazon and Netflix.
The market cut its early losses and turned positive after Gilead Sciences said that its antiviral drug remdesivir—a potential coronavirus treatment—showed positive data in clinical trials.
The company said in a statement that remdesivir led to a 62% reduction in the risk of mortality compared to standard care, sending Gilead’s stock up over 2%.
Shares of German company BioNTech, which is working with pharmaceutical giant Pfizer, similarly jumped after news that the company will have a coronavirus vaccine ready for approval by the end of this year, The Wall Street Journal first reported.
Shares of companies that would benefit from a reopening of the economy—including airlines, cruise stocks and some retailers—subsequently moved higher on the positive vaccine news Friday.
Stocks managed to hold their gains despite more bad news on the China trade front: President Trump told reporters on Friday that a phase two agreement is not a priority and that the U.S.-China relationship has been “severely damaged” by the pandemic.
The positive vaccine news comes amid a backdrop of surging coronavirus infections across the country, however: The U.S. reported a daily record of more than 63,000 new cases on Thursday, according to data from Johns Hopkins University.
What to watch for
Earnings season could bring further volatility for the stock market, experts warn. With companies scheduled to begin disclosing second quarter earnings next week, “reports may not be pretty” amid the economic fallout from the coronavirus pandemic, admits Lindsey Bell, chief investment strategist for Ally Invest. “If investors stay more focused on next year’s earnings estimates than next week’s, the market will likely keep its head above water,” she forecasts.
Key background
The United States surpassed 3 million cases earlier this week, as outbreaks continue to worsen across the West and South: Florida, for instance, reported a record number of coronavirus hospitalizations and deaths on Thursday. Despite the spike in new cases causing more volatility in the market, the Nasdaq hit a fresh record high on Thursday thanks to strength in tech stocks. Shares of big tech companies like Amazon, Microsoft, Apple and Google-parent Alphabet have all led the market higher recently.
Further reading
Dow Falls 350 Points Amid Renewed Coronavirus Fears And Worrying Economic Outlook (Forbes)
Dow Jumps 150 Points Even As U.S. Coronavirus Cases Top 3 Million (Forbes)
Dow Falls 400 Points Amid Lingering Coronavirus And Economic Fears (Forbes)
Tesla Is Now The World’s Most Valuable Car Company With A $208 Billion Valuation (Forbes)
Wall Street Quietly Begins Warning About A Biden Presidency (Forbes)
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