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Stock Market News for Apr 9, 2020

Zacks Equity Research

U.S. stocks ended sharply higher on Wednesday following investors' expectations that the U.S. economy may reopen earlier than it was previously decided. Moreover, withdrawal of the Democratic candidate from the U.S. Presidential race also lifted market participants' confidence.

Additionally, the Fed released its FOMC minutes of the two meetings held last month, where it pledged to do whatever needful to help the U.S. economy. All three major stock indexes finished in the green. U.S. stock markets will be closed on Friday on account of Good Friday.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) jumped 3.4% or 779.71 points to close at 23,433.57. Notably, 28 components of the 30-stock blue-chip index ended in green while 2 finished in the red. The Dow closed above 23,000 for the first time since Mar 13.The tech-heavy Nasdaq Composite closed at 8,090.90, surging 2.6%or 203.64 points. The tech-laden index closed above 8,000 for the first time since Mar 11.

Meanwhile, the S&P 500 climbed 3.4% to close at 2,749.98.The Real Estate Select Sector SPDR (XLRE) and Energy Select Sector SPDR (XLE) rallied 7.5% and 6.7%, respectively. Notably, all eleven sectors of the benchmark index closed in the green.

At present, the Dow, the S&P 500 and the Nasdaq Composite are 20.7%, 18.8% and 17.6% away respectively, from their all-time highs recorded on Mid-February.

The fear-gauge CBOE Volatility Index (VIX) decreased 7.2% to close at 43.35. A total of 11.56 billion shares were traded on Wednesday, lower than the last 20-session average of 15.25 billion.Advancers outnumbered decliners on the NYSE by a 6.89-to-1 ratio. On Nasdaq, a 4.87-to-1 ratio favored advancing issues.

Lockdown May Repeal Earlier-Than-Expected

On Apr 7, President Donald Trump said "We're ahead of schedule" at a White House news briefing. Although the economy could be reopened in a phased manner, Trump said "it would be nice to open with a big bang." However, he also cautioned that "We have to be on the down side of the slope" of infections while opening up the economy.

Meanwhile, White House health advisor Dr. Anthony Fauci said "Coronavirus deaths will continue to climb in the U.S. this week even as new cases near their peak and the rate of hospitalizations slow down." He further said that the U.S. should see the “beginning of a turnaround,” after this week.

Moreover, in its FOMC minutes of last month, the Fed confirmed that the current benchmark interest rate of 0--0.25% will not be hiked until the central bank sees real material changes in the U.S. economy as well as any global economic threat. Furthermore, the central will increase the size of its balance sheet in order to continue quantitative easing program to help the economy to cope with the coronavirus-induced devastations.

Bernie Sanders Withdraws  from The U.S. Presidential Race

On Apr 7, Democrat presidential hopeful Bernie Sanders withdrew his candidature from the Presidential election of 2020. As a result, Joe Biden likely to be nominated as Democrat Presidential candidate for the election which is scheduled to be held in November.

Most of the market participants were skeptical about Bernie Sanders' candidacy as they feared that Sanders' hostility to U.S. corporate and plans for universal health coverage will ultimately result in increased regulatory costs and lower corporate profits.

Consequently shares of Anthem Inc. ANTM and UnitedHealth Group Inc. UNH jumped 10.3% and 8%, respectively. Both stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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