Wall Street surges on Biden bounce
Wall Street has roared back to life with both the Dow and S&P 500 surging more than 4 per cent after former Vice President Joe Biden's strong showing in the Super Tuesday Democratic primary contests.
Biden's pack-leading results - on course to win in 10 of the 14 states that held primaries on Tuesday - powered a jump in healthcare stocks and upbeat economic data soothed worries about the coronavirus outbreak.
After the S&P 500 reached an all-time high on February 19, the stock market slid into a correction on Wednesday as the rapidly spreading COVID-19 sparked recession fears.
The S&P 500 has recovered nearly 6 per cent from Friday's closing trough but remains about 7.6 per cent below the all-time high reached on February 19.
The S&P 500 healthcare index had its best day since November 2008, advancing 5.8 per cent. Health insurers, in particular, gained ground, with the S&P 500 Managed Care index jumping 12.4 per cent.
Biden emerged as front-runner in a narrowing race for the Democratic presidential nomination following a string of primary victories, providing relief to market participants wary of the more progressive rival Bernie Sanders.
Sanders' embrace of a Medicare for All healthcare policy that would essentially abolish private insurance had cast a shadow on healthcare stocks.
"It's a relief to the market that it appears that Joe Biden is increasingly likely to get the Democratic nomination," said Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management in New York.
"Many Americans, even those inclined to agree with Trump's policies, are clamoring for a unifying voice," Pursche added. "And Joe Biden is about as benign as anyone can be."
Biden's showing acted as a balm after the market slumped following the US Federal Reserve's emergency 50-basis-point interest rate cut to head off potential economic damage from the coronavirus.
Separate data released on Wednesday showed stronger-than-expected private sector hiring, while the services sector expanded at its fastest pace in a year.
Additionally, the Mortgage Bankers Association reported the average 30-year fixed contract mortgage rate fell last week to a seven-year low.
The Dow Jones Industrial Average rose 1,173.45 points, or 4.53 per cent, to 27,090.86, the S&P 500 gained 126.75 points, or 4.22 per cent, to 3,130.12 and the Nasdaq Composite added 334.00 points, or 3.85 per cent to 9,018.09.
All of the 11 major sectors in the S&P 500 posted solid advances, led by healthcare and utilities.
Dollar Tree Inc forecast underwhelming first-quarter sales and profit, sending the discount retailer's shares down 3.6 per cent. Abercrombie & Fitch Co jumped 9.0 per cent. Campbell Soup Co's beat-and-raise earnings report gave a 10.1 per cent boost.
Advancing issues outnumbered declining ones on the NYSE by a 5.34-to-1 ratio; on Nasdaq, a 3.64-to-1 ratio favoured advancers.
The S&P 500 posted eight new 52-week highs and 31 new lows; the Nasdaq Composite recorded 37 new highs and 130 new lows.
Volume on US exchanges was 11.04 billion shares, compared with the 10.00 billion average over the last 20 trading days.
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