The Dow Rose 483 Points Because a Coronavirus Cure Looks Possible

U.S. stocks rallied for a third consecutive session amid optimism over a potential treatment for the coronavirus.

U.S. stocks rallied for a third consecutive session amid optimism over a potential treatment for the coronavirus.

Onward, Upward. U.S. stocks rallied for a third consecutive session amid optimism over a potential treatment for the coronavirus. Airline stocks, which have been battered by travel disruptions, were among the big winners. Energy stocks also gained as the price of crude oil rose more than 2%. Tesla stock (ticker: TSLA) tumbled on Wednesday after rallying nearly 60% in the previous six sessions. Ford Motor stock (F) also took a dive after the company reported disappointing fourth-quarter earnings and profit guidance for 2020. Elsewhere, the Senate has voted to acquit President Donald Trump from impeachment charges. In today’s After the Bell, we...

Hopes for a Cure

Stocks continued to rise on Wednesday driven by optimism over China’s economic stimulus and hopes that treatments for the coronavirus might have been found.

The Dow Jones Industrial Average jumped 483.22 points, or 1.68%, to close at 29,290.85. The S&P 500 gained 37.10 points, or 1.13%, to end at 3334.69, and the Nasdaq Composite added 40.71 points, or 0.43%, to close at 9508.68.

Chinese state media reported that researchers at Zhejiang University had found two drugs that can treat people with the virus. Separately, a team of U.K. scientists leading research into a vaccine have made a significant breakthrough by reducing part of the normal development time from two to three years to just 14 days, according to Sky News.

Signs that China will do whatever necessary to cushion the epidemic’s economic impact are also offering investors some comfort. Beijing has unveiled a raft of measures, including injecting $22 billion into the market, cutting banks’ reserve ratios, and instructing banks not to call in loans for companies based in the virus-stricken Hubei province.

Still, the number of confirmed coronavirus cases has risen to over 24,000 in mainland China, and the death toll has reached 490. The World Health Organization said on Wednesday that the past 24 hours have seen the most new cases of the coronavirus since the outbreak.

The epidemic’s impact on Chinese and global economy cannot be ignored just yet. A swath of Chinese cities remains in lockdown, companies in many provinces were mandated to stay closed until next week, Macau is shutting down its casinos, and many countries have imposed travel restrictions on people who’ve been in China over the past few weeks. Multinational companies such as Nike (NKE) and Walt Disney (DIS) have warned investors of softer earnings and sales, as they halted production and closed shops in China amid declining consumer traffic during the virus outbreak.

Elsewhere, U.S. companies in the services sector such as retailers and restaurants got off to a good start for the new year. The Institute for Supply Management’s nonmanufacturing index came in at 55.5 in January, beating economists consensus expectations and hitting the highest level since last summer. The ISM’s manufacturing index also rose in January for the first time in six months to reach 50.9, topping the key threshold of 50 for the first time since last July.

Still, the future of the U.S. economy remains less certain as the survey results were completed just before the coronavirus outbreak hit major headlines. The manufacturing sector will likely see a bigger impact in the following months due to its China exposure, while the services companies are more domestic-oriented and better insulated from the global health crisis.

Write to Evie Liu at

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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