U.S. stocks posted their best day in nearly two weeks Monday on signs of a slowdown in coronavirus deaths and new cases in some of the hardest-hit areas throughout the world.
The Dow Jones industrial average jumped 1,627.46 points to close at 22,679.99. The Standard & Poor’s 500 rose 7% to end at 2,663.68, its best percentage gain since March 24 after recording a third week of losses in the past four on Friday. All 11 sectors in the broad index were higher, led by gains in the technology, utility and materials sectors.
Global markets stabilized overnight as the number of people dying appears to be slowing in New York City, Spain and Italy, news that was cautiously welcomed by leaders. But they noted that any gains could easily be reversed if people didn’t continue to adhere to strict lockdowns.
A peak in the number of new coronavirus cases will bring some clarity on how deep and protracted the economic downturn will be, analysts say.
“Science is what’s going to drive the direction of the markets and economy,” says Timothy Chubb, chief investment officer at Girard, a Univest Wealth Division. “Seeing case growth flattening is a huge positive for investors.”
Traders are bracing for future updates including Thursday’s weekly report on applications for unemployment benefits, which has been the closest thing to a real-time measure of how ferociously layoffs have swept the country. Companies will also soon begin reporting their profits for the first three months of the year, with reporting season beginning in earnest in two weeks.
“In the near term, we believe market performance primarily depends on how quickly economic activity can normalize following measures to contain the virus, and the extent to which policy responses can limit bankruptcies and job losses,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note.
The global death toll from the pandemic has surpassed 70,000, with the number of U.S. deaths surpassing 10,000. There are more than 347,000 confirmed cases of coronavirus in the U.S., and more than 10,000 people have died, according to the Johns Hopkins University data dashboard. About 1.3 million cases have been confirmed worldwide.
“The spreading virus and uneven containment raise the risk of a more protracted pandemic, with the virus persisting well into the second half of 2020 before being managed or controlled,” analysts at Deutsche Bank said in a note.
Monday’s gains followed another Friday session of losses after the U.S. said employers cut 701,000 more jobs than they added last month, the first drop in nearly a decade. Investors fled the market ahead of the weekend.
The S&P 500 index has shed 21% since hitting records in February, reflecting the growing assumption that the economy is sliding into a sudden, extremely sharp recession. Still, the panic selling that dominated the first few weeks of the sell-off has eased a bit since governments and central banks unleashed massive amounts of aid to help markets and the economy.
In another sign that investors are feeling more optimistic about the economy’s path, the yield on the 10-year Treasury rose toward its first gain in four days. The yield on the 10-year Treasury yield rose to 0.68% from 0.58% late Friday.
Crude oil fell, giving up some of its huge gains from the prior week when expectations rose that Saudi Arabia and Russia may cut back on some of their production.
Benchmark U.S. crude fell $1.77, or 6.2%, to $26.56 per barrel after surging nearly $7 last week. It started the year above $60 per barrel.
In Europe, Germany’s DAX added 5.8% and the CAC 40 in Paris picked up 4.6%. Britain’s FTSE 100 rose 3.1%.
The Nikkei 225 index surged 4.2% after Japan’s prime minister, Shinzo Abe, said he will unveil a $1 trillion economic package on Tuesday. Hong Kong’s Hang Seng rose 2.2%. South Korea’s Kospi added 3.9%, while the S&P/ASX 200 in Sydney advanced 4.3%. Shares also rose in Taiwan and Southeast Asia.
Contributing: The Associated Press