Markets Close Higher As Virus News Provides Optimism…..
U.S. stocks closed higher to begin the week as headlines regarding treatment/vaccine for COVID-19 helped provide some positive sentiment as stocks built on last week’s late gains. The FDA issued an emergency use authorization of an investigational convalescent plasma COVID-19 treatment, while the Financial Times reported President Donald Trump is considering fast-tracking a potential vaccine being developed by Oxford University and AstraZeneca. Elsewhere, Chinese owned TikTok announced plans to sue the U.S. government in Federal court, following President Trump’s executive order that would ban the app if an American buyer was not found for its U.S. operations. The markets continue to await the Fed’s Jackson Hole Economic Policy Symposium that will likely command attention later this week, headlined by Thursday’s speech from Chairman Jerome Powell. Treasury yields were higher as bond prices fell, while the U.S. dollar was slightly higher. Gold was lower and crude oil prices traded higher. The economic calendar was quiet today and the equity news flow was also light. Asia and Europe both finished higher.
The Dow Jones Industrial Average gained 378 points (1.4%) to 28,308, while the S&P 500 Index rose 34 points (1.0%) to 3,431, and the Nasdaq Composite advanced 68 points (0.6%) to 11,380. In moderate volume, 773 million shares were traded on the NYSE and 3.9 billion shares changed hands on the NASDAQ. WTI crude oil was $0.28 higher at $42.62 per barrel and wholesale gasoline added $0.05 to $1.26 per gallon. Elsewhere, the Bloomberg gold spot price was down $13.81 to $1,926.66 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.1% higher to 92.31.
Stocks that had been severely punished by the disruption of the COVID-19 pandemic saw gains as the week shoves off, notably the airlines, cruise operators, hotel and resort companies, on news over the weekend from the U.S. Food & Drug Administration (FDA) regarding its ongoing efforts to fight COVID-19. The FDA issued an emergency use authorization (EUA) for investigational convalescent plasma for the treatment of COVID-19 in hospitalized patients.
The FDA said based on scientific evidence available, it concluded that this product may be effective in treating COVID-19 and that the known and potential benefits of the product outweigh the known and potential risks of the product. Today’s action follows the FDA’s extensive review of the science and data generated over the past several months stemming from efforts to facilitate emergency access to convalescent plasma for patients as clinical trials to definitively demonstrate safety and efficacy remain ongoing. The EUA authorizes the distribution of COVID-19 convalescent plasma in the U.S. and its administration by health care providers, as appropriate, to treat suspected or laboratory-confirmed COVID-19 in hospitalized patients.
Treasuries were lower with today’s economic calendar void of any major releases today, as the yield on the 2-year note increased 1 basis point (bp) to 0.15%, while the yields on the 10-year note and 30-year bond rose 2 bps to 0.65% and 1.36%, respectively.
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