(Reuters) – Wall Street rose on Wednesday on hopes the coronavirus outbreak in the United States was close to its peak, with health insurers boosted by Democratic presidential candidate Bernie Sanders suspending his campaign.
UnitedHealth Group, Anthem and Cigna jumped between 4 percent and 7 percent, and the healthcare index provided one of the biggest boosts among the 11 major S&P 500 sectors.
Sanders’ embrace of a Medicare for all healthcare policy would have essentially abolished private insurance and had cast a shadow on healthcare stocks for months.
The news added to early gains after President Donald Trump said the United States might be getting to the top of the “curve” in relation to the outbreak, even as New York and several other states posted their highest number of daily virus-related fatalities.
“The stock markets are forward looking, so there’s anticipation that, hopefully sooner rather than later, the death count will be less than anticipated,” said Marc Pfeffer, chief investment officer at CLS Investments in Westchester County, New York.
“I’d like to think that the bottom has been put in, but we can’t say for sure. The conversations are now starting to move towards the reopening of the economy.”
The benchmark S&P 500 is down nearly 20 percent from its record high in mid-February, despite big gains early this week, as measures to contain the virus brought the U.S. economy to a virtual halt.
Tesla and Boeing supplier Spirit AeroSystems became the latest companies to furlough workers.
Top Democrats in Congress said on Wednesday they would back the Trump administration’s request for $250 billion more in aid for small businesses if it includes additional money for hospitals, local governments and food assistance.
Early gains were led by the energy index, which rose over 3 percent, as oil stocks tracked crude prices higher and risk appetite was boosted by the prospect of more fiscal stimulus.
At 12:33 p.m. ET, the Dow Jones Industrial Average was up 552.74 points, or 2.44 percent, at 23,206.60, the S&P 500 was up 60.32 points, or 2.27 percent, at 2,719.73 and the Nasdaq Composite was up 147.54 points, or 1.87 percent, at 8,034.80.
Corporate earnings season starts next week with the major Wall Street banks, and companies are expected to outline more drastic measures to bolster dwindling cash reserves.
“Investors are bracing themselves for a terrible earnings season and are going to try to look for clues on what businesses will see more normalized operations,” said Yung-Yu Ma, chief strategy officer at BMO Wealth Management in Portland.
Advancing issues outnumbered decliners by a 5.73-to-1 ratio on the NYSE and a 4.23-to-1 ratio on the Nasdaq.
The S&P index recorded 2 new 52-week highs and no new lows, while the Nasdaq recorded 3 new highs and 14 new lows.
(Reporting by Uday Sampath, Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)