By Yasin Ebrahim
Investing.com – The Dow rallied on Wednesday as Federal Reserve Chairman Jerome Powell stoked hopes of more stimulus and a positive update on a potential drug to treat Covid-19 patients lifted sentiment.
“It may well be the case that the economy will need more support from all of us if the recovery is to be a robust one,” Powell said, following the Fed’s indication to keep its benchmark rate within a 0% to 0.25% range.
“The committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the Fed said Wednesday.
Many have attributed the central bank’s efforts to prop up the economy to the recent surge in the broader market since the March 23 low.
Ahead of the Fed decision and remarkets from Powell, the broader market had already racked up gains following positive news on Gilead’s potential Covid-19 drug.
Gilead Sciences (NASDAQ:GILD) said a clinical trial evaluating its drug remdesivir in coronavirus patients had met its primary goal, sending its shares nearly 7% higher.
“The study demonstrates the potential for some patients to be treated with a 5-day regimen, which could significantly expand the number of patients who could be treated with our current supply of remdesivir,” Gilead Chief Medical Officer Merdad Parsey said in a statement.
Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said he was told data from the trial showed a “clear cut positive effect in diminishing time to recover.”
The drug is expected to gain approval from the Federal Drug Administration for emergency use as soon as Wednesday.
With parts of the economy beginning to reopen, investors were reminded about the pandemic’s impact on the economy as U.S. economic growth contracted at an annual rate of 4.8% in first quarter of the year.
FAANG stocks, meanwhile, clawed back some of their losses from a day earlier after Google-parent Alphabet (NASDAQ:GOOGL) reported earnings that were better than feared. Facebook (NASDAQ:FB), which is set to report after the closing bell today, was up nearly 6%, while Amazon (NASDAQ:AMZN) was up more than 2% and Apple (NASDAQ:AAPL) gained more than 3%.
Energy, meanwhile, also supported the broader market rally, underpinned by a jump in oil prices owing to a smaller-than-expected bid in weekly U.S. crude inventories.
Stocks – Dow Racks up Gains on Fed Stimulus Hopes, Progress on Covid-19 Drug
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