Stocks up 3.4% on Wall Street as hopes build for coronavirus peak
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NEW YORK — Stocks shot 3.4% higher on Wall Street on Wednesday as investors chose to focus on the optimistic side of data about the coronavirus outbreak’s trajectory.
It’s the latest about-face in this brutally volatile stretch for the U.S. stock market, which has flip-flopped between gains and losses for six straight days.
The up moves have recently been bigger than the downward swings, though, amid signs that deaths and infections might be nearing a peak or plateau in some of the world’s hardest-hit areas.
The S&P 500 has jumped nearly 23% since it hit a low two and a half weeks ago.
Markets have been incredibly volatile in recent weeks as investors guess at how badly the coronavirus outbreak will hurt corporate profits. The economic damage is widespread, and France’s central bank said its economy entered a recession with a 6 percent drop in the first three months of the year.
Countering that is unprecedented aid from governments and central banks. Some investors are also pointing to nascent signs that infections and deaths might soon be peaking or plateauing in several hotspots around the world.
Dr. Anthony Fauci, the top U.S. infectious diseases expert, said Wednesday that the White House is working on plans to eventually reopen the country amid “glimmers of hope,” and President Donald Trump said it “will be sooner rather than later.”
Caught between those forces are investors, who have sent the S&P 500 down about 20 percent from its record set in February. Earlier, it had fallen as much as a third from that mark, reflecting investors’ expectations for a steep, sudden recession. Where stocks go from here depends on how long it takes for the economy to reopen and get closer to what used to be normal.
“It’s positive that people are talking about reopening the economy,” said Jeff Buchbinder, equity strategist for LPL Financial. “The White House has been talking about that. The more we can focus on what the economy will look like several months out, the better it will be for markets.”