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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 2.55%, S&P 500 2.96%, Nasdaq 3.53%
(Adds comments, updates to early afternoon)
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 the so-called market-leading
FAANG stocks.
Gilead GILD.O rose 7% after the drugmaker said its
experimental antiviral treatment 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.
Supporting markets further was Alphabet Inc's GOOGL.O 8.6%
surge as its quarterly report showed a drop in Google ad sales
steadied in April.
Alphabet's results helped growth stocks such as Facebook Inc
FB.O , Apple Inc AAPL.O , Amazon.com Inc AMZN.O and Netflix
Inc NFLX.O , gain between 1% and 6.5%.
The S&P 500 communication services sector index .SPLRCL
jumped 5%.
Boeing Co BA.N shares jumped 9.4% after the planemaker
said it would cut its workforce by about 10%, 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 12:43 p.m. ET, the Dow Jones Industrial Average .DJI
was up 614.86 points, or 2.55%, at 24,716.41, the S&P 500 .SPX
was up 84.81 points, or 2.96%, at 2,948.20 and the Nasdaq
Composite .IXIC was up 304.09 points, or 3.53%, at 8,911.82.
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.
"When you combine the news on the earnings front, which is
not necessarily worse than expected and...states that are
beginning the reopening process, people are trying to anticipate
how quickly the economy is going to recover," said Christopher
Zook, chief investment officer of CAZ Investments in Houston,
Texas.
General Electric Co GE.N fell 1.1% 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 8.62-to-1 ratio
on the NYSE and by a 5.47-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and no new
low, while the Nasdaq recorded 33 new highs and no new low.