• A drug developed by Gilead Sciences showed some effectiveness in treating coronavirus patients
  • China said its gross domestic product shrank 6.8% in the first quarter
  • The Conference Board said its index of leading economic indicators plunged 6.7% in March

U.S. stocks rose on Friday on hopes for an effective treatment for coronavirus.

The Dow Jones Industrial Average surged 704.81 points to 24,242.49, while the S&P 500 rose 75.01 points to 2,874.56 and the Nasdaq Composite Index edged up 117.78 points to 8,650.14.

For the week, the Dow gained 2.2%.

Friday’s volume on the New York Stock Exchange totaled 4.83 billion shares with 2,554 issues advancing, 19 setting new highs, and 420 declining, with 10 setting new lows.

Active movers were led by General Electric (GE), Gilead Sciences (GILD) and Ford Motor Co. (F).

A drug developed by Gilead Sciences (GILD), remdesivir, showed some effectiveness in treating coronavirus patients in a Chicago hospital. Gilead shares jumped 9.73%.

Analysts were cautiously optimistic about the development.

“An effective treatment is a huge deal and would create a path to open the economy and resume normal ‘social activities’ way sooner than a vaccine,” said Tom Lee, head of research at Fundstrat Global Advisors. “A treatment is safer and more scalable because it is only given to people who need to be treated.”

“It’s far too early to signal the all clear, but what this demonstrates is that coronavirus is a health problem that requires a health solution,” said Michael Arone, chief investment strategist at State Street Global Advisors. “If we can develop a health solution, I think at least from a market perspective, things will rebound pretty quickly.”

“If it is effective in keeping someone from contracting the virus or, more likely, simply reduces its severity, that would be a game-changer and [would] allow the economy to restart both more quickly and more fully,” said Jim Paulsen, chief investment strategist at The Leuthold Group.

Boeing (BA) shares surged 14.55% after the aviation giant said it will resume production in the Seattle area on Apr. 20.

Procter & Gamble (PG) reported that its fiscal third-quarter U.S. sales surged 10% as consumers stocked up on staples. PG shares rose 2.6%.

The Conference Board said its index of leading economic indicators plunged 6.7% in March, the largest decrease in its 60-year history.

"The sharp drop in the LEI reflects the sudden halting in business activity as a result of the global pandemic and suggests the U.S. economy will be facing a very deep contraction,” said Ataman Ozyildirim, senior director of economic research at The Conference Board.

China said its gross domestic product shrank 6.8% in the first quarter, its worst quarterly performance since at least 1992.

“The market is a bit optimistic right now,” said David Bailin, chief investment officer at Citi Private Bank. “Ultimately we have to have really great coordination in order to see any real improvement in the economy.”

Overnight in Asia, markets finished higher. China’s Shanghai Composite edged up 0.66%, Hong Kong’s Hang Seng gained 1.56% and Japan’s Nikkei-225 jumped 3.15%.

In Europe markets closed higher, as Britain’s FTSE-100 gained 2.82%, France’s CAC-40 jumped 3.42% and Germany’s DAX rose 3.15%.

Crude oil futures plunged 8.96% at $18.09 per barrel, Brent crude edged up 0.85% at $28.32. Gold futures dropped 2.15%.

The euro rose 0.26% at $1.0866 while the pound sterling edged up 0.34% at $1.25.

The yield on the 10-year Treasury gained 2.51% to 0.654% while yield on the 30-year Treasury edged up 0.08% to 1.276%.