Stocks notched their third weekly gain in the past four on Friday following a sharp selloff, as upbeat news about a potential coronavirus treatment helped mitigate fears about another spike in outbreaks.
The Dow Jones industrial average climbed 369.21 points to 26,075.30, recouping all of Thursday's losses after it slid 361 points on renewed concerns about a surge in virus cases.
The Standard & Poor’s 500 rose 1.1% to 3,185.04, its third week of gains in the past month. Banks were particularly strong, and financial stocks in the S&P 500 rose 3.5%, by far the biggest gain among the 11 sectors in the index. A stronger economy would mean their borrowers are better able to repay their loans.
Stocks recouped some of their premarket losses after Gilead Sciences said its antiviral drug remdesivir significantly improved clinical recovery and reduced the risk of death in COVID-19 patients. Gilead Sciences jumped 2%.
The Nasdaq Composite rose 0.7% to 10,617.44, posting another record.
It's been an erratic week for markets. Prices have swung, sometimes sharply within a single day. Friday's gains come as investors weighed a rise in virus cases in the United States on the back of improving economic data.
“For the economy to fully open up and recover, a sustained rebound will likely depend on controlling the virus through a combination of vaccines and therapeutics during the second half of 2020 and beyond,” Michael Sheldon, chief investment officer and executive director at investment advisor RDM Financial Group at Hightower, said in a note.
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U.S. government data showed 1.3 million workers filed for unemployment claims last week. That is down from 1.4 million the prior week and a peak of nearly 6.9 million in late March.
The improvements have helped validate investors’ optimism that the economy can recover as anti-virus controls are relaxed. That helped the S&P 500 rebound to within 7% of its record, after being down nearly 34%.
But economists point to a troubling shift in positive indicators, including moderating declines in the four-week average of jobless claims.
Investors are worried that worsening infection levels in the populous U.S. states of Florida, Texas and California could derail a recovery. Some states are rolling back their reopenings, while others are ordering people arriving from hotspots to quarantine.
The U.S. has surpassed 3 million confirmed cases of COVID-19, the disease caused by the novel coronavirus. More than 133,000 deaths have been confirmed, according to Johns Hopkins University data. Globally, there have been 12 million cases and over 555,000 deaths.
Energy stocks climbed with the price of oil, which has swung sharply with hopes for the economy. Benchmark U.S. crude oil rose 93 cents to settle at $40.55 per barrel.
The yield on the 10-year Treasury, which tends to move with investors’ expectations for the economy and inflation, rose to 0.63% from 0.60% late Thursday.
The CAC 40 in France added 1%, while Germany’s DAX returned 1.2%. The FTSE 100 in London gained 0.8%.
In Asia, the Shanghai Composite Index lost 1.9% to 3,383.32 and the Nikkei 225 in Tokyo shed 1.1% to 22,290.81. The Hang Seng in Hong Kong retreated 1.8% to 25,727.41.
Contributing: The Associated Press
This article originally appeared on USA TODAY: Dow: Stocks rebound as Gilead says remdesivir can reduce risk of death