US stocks have risen as a positive analysis on Gilead Sciences Inc’s antiviral drug to treat COVID-19 helped to soothe investor worries over a record rise in coronavirus cases in the United States, and as financial shares surged.
The Nasdaq posted its sixth record closing high in seven days but the index underperformed both the Dow and S&P 500, in a reversal of the recent trend.
The S&P 500 financials index rose 3.5 per cent, leading sector gains and giving the S&P 500 its biggest boost.
Bank of America Corp shares increased 5.5 per cent, Citigroup Inc jumped 6.5 per cent and JPMorgan Chase & Co climbed 5.5 per cent ahead of their financial results next week, which will mark the onset of the second-quarter earnings season.
Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle, said there was a rotation “from winners into laggards” in Friday’s trading, with the earnings period around the corner.
The United States registered the largest single-day increase in new COVID-19 infections globally for the second day in a row on Thursday, forcing people to take new precautions.
Several states have already back-pedalled on reopening plans.
Gilead’s remdesivir significantly improved clinical recovery and reduced the risk of death in COVID-19 patients, additional data from a late-stage study showed.
The drug maker’s shares climbed 2.2 per cent as it said the finding required confirmation in clinical trials.
“That kind of dampened some of the concern that’s been building over the past few days around the increased virus cases in the southern states,” said Charlie Ripley, senior investment strategist for Allianz Investment Management in Minneapolis.
The Dow Jones Industrial Average rose 369.21 points, or 1.44 per cent, to 26,075.3, the S&P 500 gained 32.99 points, or 1.05 per cent, to 3,185.04 and the Nasdaq Composite added 69.69 points, or 0.66 per cent, to 10,617.44.
For the week, the Dow rose 1.0 per cent, the S&P 500 gained 1.8 per cent and the Nasdaq jumped 4.0 per cent.
Overall profits for S&P 500 companies are expected to have fallen more than 40 per cent in the second quarter, which would be the biggest quarterly decline since the financial crisis, according to IBES data from Refinitiv.
The first coronavirus cases in the United States were identified in January and within weeks much of the economy was shut down to slow the spread, throwing millions of people into unemployment.
Companies across a range of industries have been dealing with the aftermath ever since.
The S&P 500 is up more than 40 per cent from its March bottom, thanks in part to economic data that has pointed to a revival in business activity in June.
Carnival Corp jumped 10.8 per cent after the cruise line operator said it was planning to resume operations in a phased manner and would operate with a smaller fleet on its return.
Netflix Inc rose 8.1 per cent after Goldman Sachs hiked its price target on the video streaming service’s shares.
Advancing issues outnumbered declining ones on the NYSE by a 2.87-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favoured advancers.
The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq Composite recorded 85 new highs and 17 new lows.
Volume on US exchanges was 9.57 billion shares compared with the 11.93 billion average for the full session over the last 20 trading days.