AP reports that stocks charged higher around the world Wednesday following an encouraging report on a possible treatment for COVID-19.
The optimism helped send the S&P 500 up 2.5% in midday trading, and stocks in Europe also jumped immediately after Gilead Sciences announced its experimental drug proved effective against the new coronavirus in a major U.S. government study.
Gains were widespread across markets and accelerated through the morning. Big tech and communications stocks helped lead the way after Google’s parent company revealed its revenue was stronger than Wall Street was expecting.
Gilead’s report hit markets at the same moment that a report indicated how pervasive and painful the hit to the economy from the coronavirus outbreak has been. The U.S. economy shrank at a 4.8% annual rate in the first three months of the year, its worst performance since the depths of the financial crisis in 2008.
The number 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 during the last month as investors look beyond the current economic devastation and focus instead on the prospect of economies gradually reopening. The S&P 500 has surged more than 13% in April and is on track for its best month in more than 45 years.
Read more at thenationalherald.com
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