(New York and Toronto) The New York Stock Exchange ended the week on a positive note on Friday, prompted by encouraging signals that the US economy will soon reopen and a test on a possible treatment for COVID-19.
Posted on April 17, 2020, 7:37 a.m.
Updated at 5:52 p.m.
Its flagship index, the Dow Jones Industrial Average, rose 2.99% to 24,242.49 points and the highly technological NASDAQ appreciated 1.38% to 8,650.14 points.
The S&P 500, which represents the 500 largest companies on Wall Street, rose 2.68% to 2,874.56 points.
The major indices of the New York place are displayed on the way up for the second week in a row: the Dow Jones recorded a weekly increase of 2.2%, the NASDAQ of 6.1% and the S&P 500 of 3 , 1%.
The S & P / TSX index gained 460.56 points, or 3.3%, to end the day with 14,359.88 points. It was supported by rebounds from the finance and energy sectors.
Market progress was likely triggered by news of promising results for COVID-19 treatment, as well as encouraging statistics in places like New York and Italy, observed Erik Bregar, chief monetary officer at the Exchange Bank of Canada.
However, he said he did not fully understand the tenacity of risk in the negotiations, and noted that the bond market was not showing the same optimism.
“We have seen a lot of competing stories this week. Everyone can really benefit from it. “
There is still uncertainty about the epidemic and when economies will reopen, which is causing major swings in the market. The Toronto Stock Exchange’s S & P / TSX composite index, for example, jumped 200 points in the last trading hour on Friday.
“This creates enough volatility for both optimists and pessimists to be right in one trading session,” said Bregar.
The finance group advanced 4.52%, while bank stocks had retreated the day before, due to concerns over potential declines in the real estate sector.
The energy sector climbed 8.3%, with Canadian Natural Resources stock gaining 11.38%, while Suncor Energy’s stock rose 6.0% and Pembina Pipeline’s, 6.5%.
Stocks in this sector advanced despite the further decline in crude oil prices, as the federal government announced a $ 1.7 billion program to help the oil and natural gas sector clean up abandoned wells.
Oil prices have dropped 50 cents US to 25.03 US dollars per barrel on the New York Stock Exchange as investors expect demand to decline by around 30 million barrels of oil per day for the month of April.
“The oil markets take into account the destruction of demand, something that is very real,” said Bregar.
In the foreign exchange market, the Canadian dollar traded at an average price of 71.24 cents US, up from its average price of 70.81 cents US the previous day.
Elsewhere on the New York Commodity Exchange, gold prices fell US $ 32.90 to US $ 1698.80 an ounce, while copper prices jumped 5.4 cents US to 2, US $ 35 per pound.
However, a flood of indicators this week confirmed the economic damage caused by the COVID-19 pandemic and the restrictive measures imposed to try to stop its spread.
Latest: China’s gross domestic product collapsed 6.8% in the first quarter.
But on Friday, brokers were reassured by information from the Stat News publication that the first results of a study on a drug from the Gilead laboratory (whose price jumped 9.73%) for patients with severe cases of COVID-19 were promising. Several analysts, however, urged caution in the face of still very preliminary results.
In the same sector, Moderna jumped 15.39% after announcing it had received $ 483 million from the US government to accelerate its work on a vaccine against COVID-19.
Market momentum was also fueled by the White House’s presentation on Thursday evening of a plan on how to restart America.
The decision to lift the more or less strict restrictions or confinement decreed to stem the pandemic would ultimately rest with the governors of the 50 states. But the executive has developed recommendations to “guide” them.
“The economy is going to return to normal, and the market usually does not like this notion of progressivity. But with the latest headlines, investors seem to see a light at the bottom of the tunnel, “commented JJ Kinahan of TD Ameritrade.
Another optimistic signal: Boeing announced Thursday a gradual resumption, next week, of its production of commercial aircraft in the United States, after a hiatus of several weeks. Its title jumped 14.72%.
On the bond market, the 10-year rate on the debt of the United States rose at 4:15 p.m. to 0.6465% against 0.6267% the day before at the close.
Demand for hygiene products
Among other values of the day, the American manufacturer of household and hygienic products Procter and Gamble rose by 2.63% after having seen its sales increase by 5% from January to March while the Americans rushed on its brands of toilet paper, soaps and cough syrups as COVID-19 spreads.
Oil services company Schlumberger posted a net loss of $ 7.38 billion in the first quarter, weighed down by a heavy burden of $ 8.5 billion related to the impact of the pandemic on the energy sector. To save cash, the group will notably reduce its dividends by 75%.
But excluding exceptional items, the group’s earnings per share slightly exceeded expectations and the share gained 8.75%.
Uber (+ 3.51%) said it was abandoning the forecasts announced in early February when it estimated it could generate a positive gross operating surplus (Ebitda) for the first time in the fourth quarter of 2020.
The group also announced that its net loss would be increased from $ 1.9 billion to $ 2.2 billion in the first quarter following a decrease in the value of some of its investments due to the pandemic.
Ford (+ 3.64%) also warned of a net loss of $ 2 billion over the same period due to the drop in car sales.