Wall Street continued its ascent from the depths and on Friday staged a remarkable rally that saw all three major indices advancing on the welcome news the antiviral drug "remdesivir" had shown success in rapidly curing patients in the United States seriously ill from COVID-19.
Remdesivir is a drug developed by Gilead Sciences, Inc originally as a cure for Ebola virus disease. It's now in phase three human trials as a COVID-19 cure at the University of Chicago Medical Center (UChicago Medicine). It's also involved in six other human trials worldwide.
The phase 3 trial at UChicago Medicine found most patients treated with remdesivir had "rapid recoveries in fever and respiratory symptoms," said a report by medical news website STAT. One patient was sent home only four days after being treated with the drug.
The report ignited the huge rally Friday. Investors were buoyed by the news the quick recovery of patients treated with remdesivir might help the U.S. reopen faster from the widespread and crippling shutdowns that plunged the economy into recession and seen 22 million Americans lose their jobs in only four weeks.
The Dow Jones Industrial Average surged 704.81 points, or 3%, to 24,242.49. Analysts said this was the Dow's first close above 24,000 since March 10. The S&P 500 closed 2.7% higher, at 2,874.56 while the NASDAQ Composite improved 1.4% to 8,650.14.
Analysts were all praises for remdesivir and its potential to reignite the stalled U.S. economy. Gilead's stock jumped on the news, rising almost 10%.
"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," noted 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."
For his part, former hedge fund manager and CNBC TV personality Jim Cramer said remdesivir could give the economy a "fighting chance." He tweeted, "Remdesivir sounds like something that can get people out of hospitals quickly. 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."
Michael Arone, chief investment strategist at State Street Global Advisors, said while it's far too early to signal the all clear, what the results of the remdesivir human trial demonstrates is the coronavirus "is a health problem that requires a health solution. If we can develop a health solution, I think at least from a market perspective, things will rebound pretty quickly."
Friday's stunning rally propelled the S&P 500 to its first back-to-back weekly gains since early February and saw it jump above its 50-day moving average. The broader market index climbed 3% for the week. The Dow improved 2.2%. The NASDAQ advanced 6.1% week to date.
Through Friday's close, the three major indices were all up more than 25% from their late-March lows. Analysts note the stock market has rallied since March 23 as new COVID-19 cases in the U.S. and globally show signs of leveling-off. The S&P 500 has soared more than 30% from its March 23 intraday low. The Dow gained 33.1% over that same time frame.
