U.S. stocks closed notably higher on Monday, led by big gains for health care companies announcing developments that could aid in the coronavirus outbreak.
Monday’s rise brings the market’s surge over the past week to 17% as Wall Street nears the end of a historically bad quarter. Trading remains tentative amid uncertainty about whether global authorities can nurse the economy through the severe damage being wrought by the coronavirus pandemic.
The Dow Jones Industrial Average closed up nearly 700 points, while U.S. oil prices fell 6.6% to the lowest level in 18 years, according to The Wall Street Journal.
The S&P 500 rose more than 3% for its fourth gain in five days, following up its best weekly gain since hitting bottom after the financial crisis 11 years ago. The S&P 500 remains 22% below the record high set last month, and oil tumbled to an 18-year low.
The Dow closed up 690.70 or 3.19% to 22,327.48.
The NASDAQ Composite Index was up 271.77 or 3.62% to 7,774.15.
The S&P 500 closed up 85.18 or 3.35% to 2,626.65.
U.S. stocks were shaky in early trading but remained in positive territory all day as markets around the world made moves to shore up economies.
A surge for health care stocks led the way at the week's open. Johnson & Johnson leaped 8% after saying it expects to begin human clinical studies on a vaccine candidate for COVID-19 by September. Abbott Laboratories jumped 6.4% after saying it has a test that can detect the new coronavirus in as little as five minutes.
Stocks jumped last week after the Federal Reserve promised to buy as many Treasurys as it takes to get lending markets running smoothly and Capitol Hill reached a deal on a $2.2 trillion rescue package for the economy.
"The market wants to see everything line up, and last week everything lined up," said Nela Richardson, investment strategist at Edward Jones, referring to the unprecedented aid from the Fed and Congress.
Abbott Laboratories jumped 7.1,% and Johnson & Johnson gained 6.5%. Abbott said it has a test that can detect the new coronavirus in as little as five minutes. Johnson & Johnson said it expects to begin human clinical studies on a vaccine candidate for COVID-19 by September.
Some of Monday's sharpest action was in the oil market, where benchmark U.S. crude fell 6.6% to $20.09 a barrel after touching its lowest price since 2002.
Oil started the year above $60 and has plunged on expectations that a weakened economy will burn less fuel. The world is awash in oil, meanwhile, as producers continue to pull more of it out of the ground.
Most voices on Wall Street are telling investors to prepare for more losses as economists forecast a downturn that could surpass even the Great Recession, but the first green shoots of optimism may be appearing.
Congress last week passed a $2 trillion rescue package for the economy, and the Federal Reserve promised to buy as many Treasurys as it takes to get lending markets working smoothly. Forced selling by investors looking to raise cash may also be easing, and Morgan Stanley strategists said the worst may be behind us. They say another pullback in stocks is likely, but they say the roughly 25% drop for stocks since the S&P 500 set its record last month offers some buying points for investors willing to wait six to 12 months.
Goldman Sachs, though, warned the market will likely turn lower in coming weeks.
Most investors say they expect markets to remain extremely volatile until the virus slows its spread. Until then, investors won’t know how long the economic downturn will ultimately last.
President Donald Trump extended restrictive social distancing guidelines through April, bowing to public health experts who presented him with even more dire projections for the expanding coronavirus pandemic.
Global infections now total more than 720,000. And more than 34,000 people have died around the world.
About the Author
