U.S. stocks closed sharply higher Wednesday for the third consecutive session as Wall Street continued its rebound from a selloff sparked in part by the outbreak of an Asian virus that has killed hundreds and infected tens of thousands.
Bullish sentiment was seen driven by hopes that stepped up containment efforts and work toward new vaccines could blunt the economic impact of the coronavirus.
How did the benchmarks fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.69% rose 483.22 points, or 1.7%, to end at 29,290.85, while the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.51% gained 37.10 points, or 1.1%, to close at 3,334.69. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -1.53% added 40.71 points, 0.4%, ending the session at 9,508.68.
Those levels mark new closing highs for the S&P 500 and Nasdaq, while the latter also set a new intraday high at 9,574.94.
For the week, the Dow is up 3.7%, the S&P 500 3.4%, and the Nasdaq has gained 3.9%.
What drove the market?
Stocks were lifted in part on hopes that new treatments will soon be brought to bear against the Wuhan virus that has stricken China and spread to other parts of the globe. Sky News reported on Wednesday that U.K. researchers had made progress in lab tests toward a vaccine for the virus that has been likened to SARS, or severe acute respiratory syndrome.
Separately, a research team at Zhejiang University claimed to identify a cocktail of drugs, namely Abidol and Darunavir, that has thus far proven effective at stanching the virus in infected patients. A separate report from China’s media pointed to a combination of Lopinavir and Ritonavir as an effective treatment.
However, the World Health Organization has said that there are “no known effective therapeutics” against the virus, in response to the media reports. The WHO will convene hundreds of experts next Tuesday and Wednesday to create a plan for developing effective treatments against the disease, it said Wednesday, according to Reuters .
“Today’s rebound is being driven by rumors about some progress made on the virus, vaccines that are being worked on and efforts to slow down the spread,” Randy Frederick vice president of trading and derivatives at Charles Schwab told MarketWatch.
The number of confirmed cases of the coronavirus rose above 24,000, as of Tuesday, and Hong Kong reported its first death from the virus, which has claimed more than 490 lives.
Although the outbreak will likely dent China’s growth, overall anxieties have eased, helping Wall Street investors focus on corporate quarterly results, which have thus far been upbeat. A batch of earnings are still rolling out this week.
With a little less than half of the S&P 500 companies having reported, the blended earnings growth rate shows a 0.1% rise, compared against a 2.0% decline expected at the start of earnings season, according to FactSet.