The Dow Jones industrials soared almost 1,200 points on Wednesday as Wall Street cheered Joe Biden’s surprise Democrat primary lead over Sen. Bernie Sanders — and funding to combat the deadly coronavirus.
Stocks soared at the opening bell on Biden’s Super Tuesday surge to the front of the Democratic presidential race ahead of Sanders, who’s policies threaten large financial institutions and health care companies.
The gains were only buoyed midday when US lawmakers struck a deal for $8 billion in funding to battle the virus’s spread.
The Dow Jones industrial average gained a total of 1,173.45 points, or 4.5 percent, to 27,090.86 during the all-day winning streak, while the S&P 500 rose 4.2 percent to 3,130. The Nasdaq composite ended the day up 3.8 percent to 9,018.
Health care stocks did especially well amid dimmed prospects of Sanders’ “Medicare for All” proposal. Health insurance provider Anthem jumped 15.6 percent to end the day at $296.42, while Humana, also a health insurance provider, rose 14.4 percent to $372.34.
“Mr. Biden doesn’t terrify the top one percent and corporate America, nearly as much as Mr. Sanders,” Jeffrey Halley, senior currency analyst at OANDA, wrote in a Wednesday commentary.
Wall Street is also likely encouraged by the floundering campaign of Sen. Elizabeth Warren, who supports many of the same policies as Sanders, according to Ritholtz Wealth Management CEO Josh Brown. Warren won no Super Tuesday contests and finished behind Biden in her home state of Massachusetts.
“Wall Streeters have always secretly been more afraid of her than anyone else given her …expertise,” Brown said on Twitter.
The Dow plunged 786 points Tuesday as the Fed’s first emergency rate cut since 2008 failed to quell traders’ fears about the coronavirus weakening the world economy. The outbreak has killed more than 3,200 people — including at least nine in the US — and threatened to slash economic growth this year.
The stock markets have been volatile amid fears about the coronavirus spreading further outside China. The Dow gained nearly 1,300 points Monday, its biggest single-day point gain ever, after shedding more than 3,500 points in Wall Street’s worst week since 2008.
Congress tried to quell some of those fears on Wednesday with a bipartisan bill to provide $8.3 billion to battle the coronavirus.
The bill, which could be passed by both houses by the end of the week, would provide more than $2 billion to help federal, state, and local governments combat the spread of coronavirus, including $300 million for the Centers for Disease Control’s rapid response fund.
Another $3 billion would go to finding a cure, as well as for treatments and diagnostic testing.
US stock have been on a rollercoaster ride as the coronavirus has spread outside China, where its severely hampered production, including of goods made by US companies.
It’s spread to the US has resulted in numerous tech companies cancelling big events.
Starbucks on Wednesday said it’s normally festival annual meeting scheduled for March 18 will now be held online. The death toll in Washington state, where the coffee giant is headquartered, has surged to nine since the first US death was reported on Sunday.
