US STOCKS-U.S. stocks rally on coronavirus drug hopes

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* Gilead's COVID-19 treatment shows promise
* Fed leaves key interest rates near zero
* Boeing jumps on job cuts, plans to boost liquidity
* Q1 GDP shows steepest contraction in 11 years
* Indexes up: Dow 2.09%, S&P 500 2.54%, Nasdaq 3.33%

(Updates to late afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, April 29 (Reuters) - Wall Street stock indexes
surged on Wednesday as hopes for an effective COVID-19 treatment
prompted a broad rally and helped investors look past bleak
economic data.
Big tech companies returned to the lead, providing the
biggest boost to all three major U.S. stock averages and pushing
them closer to their all-time highs reached in February.
All are well within 20% of their record levels, with the
tech-heavy Nasdaq now within 10% of its high.
Smaller companies, which stand to benefit more from
restrictions being lifted on a state-by-state basis, continue to
outperform their larger counterparts, with the Russell 2000
.RUT on track for its sixth straight advance.
Drugmaker Gilead Sciences Inc GILD.O announced that its
drug remdesivir is showing promise as an effective COVID-19
treatment, giving a boost to the broader market and sending its
shares up 6.2%. "There's an anticipation of a potential return to normalcy,
with states talking about procedures to slowly reopen cities and
towns and get people spending again," said Matthew Keator,
managing partner in the Keator Group, a wealth management firm
in Lenox, Massachusetts.
"The market is a forward-looking vehicle and it's starting
to look up."
U.S. Federal Reserve wrapped up its two-day monetary policy
meeting, leaving key interest rates near zero and vowing to use
a "full range" of its tools to aid the economy in the face of a
pandemic that poses "considerable" medium term risks.
Stocks slightly trimmed their gains after the Fed's
statement.
"Words matter with the Fed, maybe now more than ever,"
Keator added. "Because of the uncertainty out there, the Fed is
one place markets can find certainty as to what they plan on
doing and for how long."
The U.S. economy suffered its sharpest decline in 11 years,
with first-quarter GDP contracting at a 4.8% quarterly
annualized rate according to the Commerce Department, marking
the end of the longest U.S. economic expansion on record.
The Dow Jones Industrial Average .DJI rose 503.57 points,
or 2.09%, to 24,605.12, the S&P 500 .SPX gained 72.69 points,
or 2.54%, to 2,936.08 and the Nasdaq Composite .IXIC added
286.46 points, or 3.33%, to 8,894.19.
Of the 11 major sectors in the S&P 500, nine were in the
black, with energy companies .SPNY enjoying the largest
percentage gain.
Earnings season has hit full-stride, with 192 of the
companies in the S&P 500 having reported. Of those, 64.6% have
beaten consensus estimates, according to Refinitiv data.
In aggregate, first-quarter S&P 500 earnings are seen
dropping 15.1 percent from a year ago, a stark reversal from the
6.3% annual growth forecast on Jan. 1, per Refinitiv.
Google parent Alphabet Inc GOOGL.O jumped 9.0% after the
company reported steady advertising sales and a 13% year-on-year
revenue increase. Boeing Co BA.N shares surged 7.8% after the planemaker
announced it would shrink its workforce and production to
contend with plunging demand. Ride share company Lyft Inc LYFT.O plans to cut 17% of its
workforce, according to a Reuters exclusive. Its shares were up
4.2%. Results from Facebook Inc FB.O , Microsoft Corp MSFT.O
and Tesla Inc TSLA.O are expected after the closing bell.
Advancing issues outnumbered declining ones on the NYSE by a
6.89-to-1 ratio; on Nasdaq, a 4.81-to-1 ratio favored advancers.
The S&P 500 posted 5 new 52-week highs and no new lows; the
Nasdaq Composite recorded 38 new highs and no new lows.