Continuing on the backs of extended session gains from Thursday, equities rocketed higher after a report said a Gilead Sciences drug was beneficial in ameliorating the length of infection from the coronavirus, offering optimism to investors that a panacea could be on the horizon, and offer some relief to the damaged economy.
The Dow Jones Industrial Average has pulled back considerably, up only 1.7% after trading up by as much as double that earlier in the session. Apple and Amazon are some of the biggest losers on Friday, stemming the broader market’s gains. Amazon has been successful as many Americans remain quarantined at home because of the pandemic and would likely suffer losses if an effective treatment allowed the U.S. economy to open up sooner, and have people interact and consume more in person.
Gilead shares also surged over 7% after STAT news reported that a Chicago hospital treating coronavirus patients with redeliver in a trial were recovering rapidly from severe symptoms. The publication cited a video it obtained where the trial results were discussed.
Most analysts and investors have felt that curtailing the virus is key to improving the economic backdrop in the long term.
“An effective treatment is a huge deal and would create a path to open the economy and resume normal ‘social activities’ way sooner than a vaccine,” said Tom Lee, head of research at Fundstrat Global Advisors. “A treatment is safer and more scalable because it is only given to people who need to be treated.”
“If it is effective in keeping someone from contracting the virus or, more likely, simply reduces its severity, that would be a game-changer and [would]allow the economy to restart both more quickly and more fully,” said Jim Paulsen, chief investment strategist at The Leuthold Group, about the Remdesivir trial report.
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