Stocks surged after a report said a Gilead Sciences drug showed some effectiveness in treating the coronavirus, giving investors some hope there could be a treatment solution that helps the country reopen faster from the widespread shutdowns that have plunged the economy into a recession.
The moves put the S&P 500 on track for its first back-to-back weekly gains since early February. Through Thursday’s close, the S&P 500 has risen 0.35 percent, while the Nasdaq Composite climbed 4.65 percent, lifted by double-digit gains in Amazon and Netflix.
A jump in Boeing shares and a rollout Thursday evening of the White House plan to reopen the economy also added to the bullish tone on Friday.
Gilead shares jumped more than 13 percent in premarket trading after STAT news reported that a Chicago hospital treating coronavirus patients with remdesivir in a trial were recovering rapidly from severe symptoms. The publication cited a video it obtained where the trial results were discussed.
“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.”
Other studies have shown remdesivir to be an effective treatment against the coronavirus. However, they have been smaller in scale. Gilead itself also cautioned that anecdotal reports are not enough to determine yet whether the drug will be an effective treatment.
Still, CNBC’s Jim Cramer said the drug could give the economy a “fighting chance.”“Remdesivir sounds like something that can get people out of hospitals quickly,” Cramer said in a tweet Thursday. “That allows our economy to have a fighting chance..I think that remdesivir would cut the morbidity ... which would change how quickly we can open... and what we can do.”
Boeing shares jumped about 7 percent after the airplane maker said it would resume production in the Seattle area as early as April 20.
President Donald Trump said Thursday that “our experts say the curve has flattened and the peak … is behind us.”
He also issued guidelines to open up parts of the U.S. Thursday night, which identifies the circumstances necessary for areas of the country to allow employees to start returning to work. The decision to lift restrictions will ultimately be made by state governors.
Investors have said that news of an effective treatment or vaccine would be needed for stocks to mount a sustainable comeback.