Wednesday, April 29, 2020

The U.S. stock market is a day away from having its best month since 1974

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The U.S. stock market is a day away from having its best month since 1974. The optimism helped the S&P 500 jump 2.66 percent higher, and it extended a rally that’s brought the U.S. stock market to the brink of its best month in 45 years. The S&P 500 has surged more than 15 percent in April, putting it within one day of its best month since its 16.3 percent gain in October 1974. Over the past 12 months, the S&P is down 2.6 percent. The Dow Jones Industrial Average rose 2.2 percent. The Nasdaq Composite climbed 3.57 percent. The small-cap Russell 2000 soared 4.83 percent. Stocks in Europe also jumped immediately after Gilead Sciences said its experimental drug proved effective against the new coronavirus in a major U.S. government study. The French CAC 40 rose 2.2 percent after being down before the Gilead report. The German DAX returned 2.9 percent, and the FTSE 100 in London added 2.6 percent. Gilead’s report hit markets at the same moment that a report showed how pervasive and painful the hit has been to the economy from the coronavirus outbreak. The U.S. economy shrank at a 4.8 percent annual rate in the first three months of the year, its worst performance since the depths of the financial crisis in 2008. The figure was worse than investors were expecting, and it’s “merely the tip of the iceberg,” said Michael Reynolds, investment strategy officer at Glenmede. Job losses have exploded since early April, as layoffs sweep the nation following widespread stay-at-home orders, and economists expect to see even worse numbers for the second quarter of the year. But stocks have been rallying over the last month as investors look beyond the current economic devastation and focus instead on the prospect of economies gradually reopening.

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