By Lewis Krauskopf
NEW YORK (Reuters) - World stock markets surged on Wednesday following encouraging news for an experimental COVID-19 treatment and some positive earnings reports, while beaten-up oil prices surged.
MSCI's gauge of stocks across the globe (MIWD00000PUS) gained 2.25%. Major U.S. averages were up well over 2%, while the pan-European STOXX 600 index (STOXX) rose 1.75%.
Gilead Sciences Inc (O:GILD) said that in a clinical trial, its experimental antiviral drug remdesivir helped improve outcomes for patients with COVID-19, the disease caused by the coronavirus.
The development of treatments for the virus has been seen by strategists as critical as they could help countries emerge from self-imposed lockdowns aimed at curbing the outbreak that have crippled economies.
Data on Wednesday showed the U.S. economy contracted in the first quarter at its sharpest pace since the Great Recession, falling at a 4.8% annualized rate.
"While we wait for a vaccine, we are looking out for anything that will help us get back into society, and we're all hanging on this data on a day-by-day basis," said Linda Duessel, senior equity strategist at Federated Hermes in Pittsburgh, Pennsylvania.
On Wall Street, the Dow Jones Industrial Average (DJI) rose 532.33 points, or 2.21%, to 24,633.88, the S&P 500 (SPX) gained 76.77 points, or 2.68%, to 2,940.16 and the Nasdaq Composite (IXIC) added 288.67 points, or 3.35%, to 8,896.40.
As the heart of first-quarter corporate results season arrives, Google parent Alphabet's (O:GOOGL) shares jumped 9.3% after the company said a drop in Google ad sales steadied in April, with shares of other tech titans also rallying. Boeing (N:BA) shares rose 9.0% after the planemaker's report.
In Europe, shares of automakers (SXAP) were lifted after German carmaker Daimler (DE:DAIGn) forecast operating profit at its Mercedes-Benz Cars & Vans division above the prior-year level and rival Volkswagen (DE:VOWG_p) said it expected to be profitable on a full-year basis.
Investors across the world are growing confident the coronavirus pandemic may be peaking as parts of the United States, Europe and Australia gradually ease restrictions. New Zealand this week allowed some businesses to reopen.
Oil prices surged after U.S. crude stockpiles grew less than expected and gasoline posted a surprise draw, adding to optimism for an improvement in demand as some European countries and U.S. cities move to ease coronavirus lockdowns.
U.S. crude (CLc1) recently rose 28.93% to $15.91 per barrel and Brent (LCOc1) was at $22.72, up 11.05% on the day.
"As long as we see openings in the economy, we will not see plunges like we saw a week ago," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
In currencies, the dollar index, tracking the greenback against six major peers (=USD), fell 0.109%, with the euro (EUR=) up 0.28% to $1.0848.
Benchmark U.S. 10-year notes (US10YT=RR) last rose 3/32 in price to yield 0.6017%, down from 0.61% late on Tuesday.
Italian government bond yields rose after a downgrade of the country's credit rating by Fitch.
Markets were also focused on the U.S. Federal Reserve meeting, with the central bank's policy statement due at 2 p.m. EDT (1800 GMT).