Wednesday's Stock Market Open: US Equities Rise On Hopes For Coronavirus Vaccine, Oil Prices Jump

U.S. stocks traded higher on Wednesday following reports in China and U.K. that scientists have made progress in finding a vaccine for the coronavirus.

The Dow Jones Industrial Average rose 328.16 points to 29,135.79 while the S&P 500 gained 28.63 points to 3,326.22 and the Nasdaq Composite Index advanced 25.25 points to 9,493.22.

China’s National Health Commission reported Tuesday night that 490 people have died from coronavirus in the country and 24,324 cases have been confirmed.

Reuters reported that a Chinese TV station said a research team at Zhejiang University in Zhejiang, China, had discovered an effective drug to treat coronavirus. Separately, Sky News of U.K. reported Wednesday that a scientist Imperial College London had made a breakthrough in finding a vaccine for the virus.

However, the World Health Organization downplayed these alleged developments, citing that “there are no known effective therapeutics against” this new virus.

During his State of the Union address on Tuesday night, U.S. President Donald Trump said that the U.S. is working closely with the Chinese government on the virus outbreak.

“Against a somewhat improved backdrop, markets appear healthier this morning,” said Nema Ramkhelawan-Bhana, an analyst at Firstrand Bank Ltd. In Johannesburg. “Investors appear less fearful of the secondary effects of the virus despite travel restrictions still being in place, suggesting that, though harmful, the impact on the global economy will be short-lived.”

In economic news, private sector employment in the U.S. increased by 291,000 jobs in January according to the ADP National Employment Report. The U.S. trade deficit edged down 1.7% to $617 billion in 2019 from almost $628 billion in 2018, marking the first such decline in six years.

The Institute for Supply Management said on Wednesday that its nonmanufacturing activity index rose 55.5 in January, the highest such level since August.

Overnight in Asia, markets finished higher. China’s Shanghai Composite gained 1.25%, while Hong Kong’s Hang Seng rose 0.42%, and Japan’s Nikkei-225 advanced 1.02%.

In Europe markets closed higher, as Britain’s FTSE-100 rose 0.57%, France’s CAC-40 climbed 0.85% and Germany’s DAX gained 1.48%.

Crude oil futures jumped 3.67% at $51.43 per barrel and Brent crude rose 3.54% at $55.87. Gold futures climbed 0.42%.

The euro dipped 0.34% at $1.1005 while the pound sterling shed 0.2% at $1.3005.