US stocks rise as investors hope for coronavirus breakthrough
US stocks have risen in afternoon trading despite dire economic data from China as investors grow optimism about a possible coronavirus drug breakthrough.
The Dow Jones was up 1.6 per cent in morning trading in the US. The S&P 500 was 1.5 per cent higher and the Nasdaq had risen 0.6 per cent.
European shares were also boosted by positive reports about a drug from US firm Gilead. The UK’s FTSE 100 was up 2.8 per cent and Germany’s Dax was 2.9 per cent higher. The pan-European Stoxx 600 had risen XX per cent.
Investors looked firmly past data from China overnight that showed the economy contracted for the first time since quarterly records began in the first three months of the year.
Instead, they fixated on a report from medical news site Stat that said Gilead’s coronavirus drug had shown positive signs during a trial in Chicago.
A University of Chicago hospital that is part of a wider trial of the drug said its patients taking the medicine were rapidly recovering from fever and respiratory systems, according to Stat.
“It’s worth noting that the clinical trial was very small,” said Craig Erlam, market analyst at currency firm Oanda. “Everyone is being urged to treat them with caution.”
“But let’s face it, we’ve waited a long time for some hope in the fight against this horrendous disease, people are going to get carried away.”
Investors were also excited by the prospect that the US could soon reopen parts of its economy. President Donald Trump yesterday laid out “guidelines” for states about reopening, saying they had to first see a sustained fall in new cases.
They are the first official steps towards the world’s largest economy returning to some kind of normality.
David Madden, market analyst at CMC Markets, said: “Some businesses in Italy, Spain and Austria re-opened this week, and Germany will follow suit next week.”
“The steps taken so far to return to normal have been small, but at least they are heading in the right direction.”