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US STOCKS-Wall St jumps on coronavirus drug hopes; Fed in focus

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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)

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 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 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 , Apple Inc, Inc and Netflix Inc, gain between 1% and 6.5%.

The S&P 500 communication services sector index jumped 5%.

Boeing Co 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 was up 614.86 points, or 2.55%, at 24,716.41, the S&P 500 was up 84.81 points, or 2.96%, at 2,948.20 and the Nasdaq Composite 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 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. (Reporting by C Nivedita, Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Bernard Orr and Arun Koyyur)