COVID drug hopes outweigh plunging GDP to boost stocks

Stocks move higher at the open as investors await Federal Reserve Chairman Powell’s 2:30 p.m. ET press conference after the central bank concludes its two-day policy meeting; Dow +1.8%, S&P 500 +1.9%, Nasdaq +2.3%.

Stocks enjoyed an extra boost after Gilead Sciences (+3.5%) reported that its heavily watched remdesivir COVID-19 drug met the primary endpoint of a government run study.

Sentiment also is helped by Alphabet’s (+7.8%) smaller than expected decline in revenue growth decline while YouTube ad revenues also beat expectations.

Meanwhile, U.S. Q1 GDP shrank 4.8%, the biggest slide since 2008 and the first contraction since 2014, led by a plunge in consumer spending due to coronavirus restrictions.

European bourses trade broadly higher, with U.K.’s FTSE +2%, Germany’s DAX +1.8% and France’s CAC +1.2%; in Asia, Japan’s Nikkei -0.1% and China’s Shanghai Composite +0.4%.

In the U.S., the communications sector (+4.2%) tops the early S&P sector leaderboard on post-earnings strength in Alphabet, while energy (+3.9%) is another standout.

WTI June crude oil +27.1% to $15.69/bbl following a report that showed a smaller than expected build in U.S. inventories as well as hopes that economies will reopen sooner than expected.

U.S. Treasury prices edge higher, with both the 10-year and two-year yields down a basis point at 0.60% and 0.19%, respectively.

https://seekingalpha.com/news/3566063-covid-drug-hopes-outweigh-plunging-gdp-to-boost-stocks