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* Gilead's says drug shows improvement in COVID-19 patients
* Alphabet jumps as drop in Google ad sales steady
* Fed to release policy statement at 2 p.m. EDT
* Boeing jumps on job cuts, plans to boost liquidity
* U.S. economy contracts in Q1, worse still to come
* Indexes up: Dow 2.27%, S&P 500 2.54%, Nasdaq 3.11%
(Adds comments, details, updates price action)
By C Nivedita and Shreyashi Sanyal
April 29 (Reuters) - U.S. stocks jumped to seven-week highs
on Wednesday as Gilead Sciences gave an encouraging update on a
potential COVID-19 treatment and upbeat earnings from
Google-parent Alphabet boosted shares of other technology and
internet giants.
Gilead GILD.O rose 5% after the drugmaker said its
experimental antiviral drug remdesivir helped improve symptoms
for COVID-19 patients who were given the drug early.
"Optimism is growing that remdesivir will get fast track
approval, but traders need to exercise some caution as it has
yet to be proven safe nor effective in treating COVID-19," said
Edward Moya, senior market analyst at OANDA in New York.
The three main indexes have recovered over 30% from their
mid-March lows, boosted by aggressive stimulus efforts and, more
recently, on hopes of an economic revival as many U.S. states
begin to relax lockdown measures.
Growth stocks such Facebook Inc FB.O , Apple Inc AAPL.O ,
Amazon.com Inc AMZN.O and Netflix Inc NFLX.O gained between
1.8% and 6%, while Alphabet Inc GOOGL.O surged 8.6% as its
quarterly report showed Google ad sales steadied in April.
The S&P 500 communication services sector index .SPLRCL
jumped 4.8%.
Boeing Co BA.N shares climbed 8% after the planemaker said
it would cut its workforce by about 10%, further reduce 787
Dreamliner production and try to boost liquidity. All eyes will be on the policy statement by the Federal
Reserve at the end of its two-day meeting at 2 p.m. EDT (1800
GMT). "They are going to be broadly supportive of the markets, the
economy and signal a continuing commitment to further ramp up
interventions if necessary, to support the recovery," said Tony
Roth, chief investment officer at Wilmington Trust in
Wilmington, Delaware.
At 11:25 a.m. ET, the Dow Jones Industrial Average .DJI
was up 546.59 points, or 2.27%, at 24,648.14, the S&P 500 .SPX
was up 72.72 points, or 2.54%, at 2,936.11 and the Nasdaq
Composite .IXIC was up 267.60 points, or 3.11%, at 8,875.34.
Analysts foresee a sharper decline in second-quarter
earnings, with profits for S&P 500 companies expected to record
a 36% decline following a 15% anticipated drop in the first
quarter, according to Refinitiv data.
Investors shrugged off data that showed the U.S. economy
contracted in the first quarter at its sharpest pace since the
Great Recession, ending the longest expansion in history.
"The economic data is backward-looking and markets will
continue to be forward-looking," said Chris Zaccarelli, chief
investment officer at Independent Advisor Alliance in Charlotte,
NC.
Markets are trying to anticipate a resumption of economic
activity in the short run and a vaccine in the medium term, he
said.
The mood by midday was risk-on, with only defensive plays
like the consumer staples .SPLRCS and utilities .SPLRCU
sub-sectors trading lower.
General Electric Co GE.N fell 2% after its industrial
businesses took a $1 billion hit to cash flow in the first
quarter and it warned the damage would be worse in the next.
Advancing issues outnumbered decliners by a 7.66-to-1 ratio
on the NYSE and by a 5.09-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and no new low,
while the Nasdaq recorded 31 new highs and no new low.