US close: Stocks close sharply higher as White House extends contain measures
By Iain Gilbert
Date: Monday 30 Mar 2020
(Sharecast News) - Wall Street stocks turned in a solid performance on Monday after Johnson & Johnson identified a lead candidate for coronavirus treatment and the White House extended measures to contain the spread of the outbreak.
At the close, the Dow Jones Industrial Average was up 3.19% at 22,327.48, while the S&P 500 was 3.35% firmer at 2,626.65 and the Nasdaq Composite saw out the session 3.62% stronger at 7,774.15.
The Dow closed 690.70 points higher on Monday after seeing out the previous week in the red despite the US House of Representatives voting in favour of an approximately $2.2trn economic relief package following a late bout of selling. The deal includes business loans, increased unemployment benefits and government payments of $1,200 to adults and $500 per child, making it the largest stimulus package in US history.
Dow futures had the blue-chip index opening lower before the bell following a sharp downturn in oil prices that saw West Texas Intermediate prices drop 4.70% to $20.50 per barrel and Brent Crude fall 7.58% lower to $23.04 a barrel.
However, sentiment got a boost in early trade after Johnson & Johnson said it had identified a lead candidate for the treatment of the coronavirus. Human testing on the vaccine was expected to begin in September.
In terms of the outbreak, the total count of global Covid-19 cases hit more than 713,000, raising uncertainty regarding as to when lockdown and quarantine measures would be removed and the US economy can return to normal.
On Sunday, Donald Trump also seemingly accepted the scientific reality that it would be impossible to turn the ride of the outbreak before Easter and extended social distancing guidelines until 30 April.
The President also predicted the death toll in the US, which doubled from Thursday to Sunday, would peak within two weeks but stated that the country could reach "the bottom of the hill" by 1 June.
Governors of at least 21 US states closed "non-essential businesses" over the weekend and implored resident to stay at home and the Federal Reserve also launched a series of measures to sustain the economy, including an open-ended asset-purchase program.
On the macro front, contracts to purchase previously owned homes rose for the second straight month in the US during February. The National Association of Realtors' pending home sales index grew to a reading of 111.5 last month, up 2.4% month-on-month.
Elsewhere, the Dallas Fed's manufacturing index tumbled to a record low in March as more factories across the US were hit by the economic fallout stemming from the coronavirus pandemic.
The Dallas Fed said that its general economic index had decreased to -70, its lowest reading since back in 2004. Readings below zero indicate contracting activity in the sector.
No major corporate results were released on Monday.
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