Stocks rallied Monday, with all major indices snapping back into positive territories as investors seized on any positive developments in the fight to mitigate the spread of COVID-19, the disease caused by the coronavirus.The stock market is, of course, not the economy.
And this is likely a dead-cat bounce — a temporary recovery after a big fall.
The question is how many dead-cat bounces will we see in the coming weeks?And while the economic fallout from the COVID-19 pandemic is continuing, that didn''t stop investors from grasping at data from John Hopkins University that suggests the number of new COVID-19 cases is slowing.
The institution coronavirus map, which has become a go-to source, showed 25,200 new cases rising on March 31, then rising to 33,300 new cases by April 3.
Those numbers dropped to 28,200 new cases April 4, per its data; other trackers have posted slightly different results.Today rally will be tested in the days and weeks to come as COVID-19 cases continue and eventually hit a peak before plateauing.
Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases and a member of the White House coronavirus task force, has warned that cases, and deaths, will likely surge in the next week.Here are the day results:Dow Jones Industrial Average: up 7.59%, or 1,597.21 points, to close at 22.649.74S-P 500: rose 6.95%, or 172.86 points, to close at 2,661.51Nasdaq composite: popped 7.33%, or 540.15 points, to close at 7,913.24There were other indirect COVID-19 fundamentals, such as new sales guidance or analyst notes that also moved certain stocks.E-commerce stocks, including eBay and Amazon, saw positive movement.
Online retailer Wayfair was perhaps the biggest mover in this category.
The company shares opened 36% higher after reporting its gross revenue growth rate more than doubled at the end of March.
Wayfair shares closed up 41.7% to $71.50.Music streaming company Spotify saw shares decline more than 4% after Raymond James downgraded the stock from &strong buy& to &market perform,& citing that COVID-19 was causing less engagement and fewer downloads as users spend more time indoors.
Spotify shares did manage to bounce back during the day and ended closing up nearly 0.33%, to $122.52.Shares of SaaS companies rallied on the day as well, with the Bessemer cloud index rising 6.79% on the day; shares of SaaS companies, modern software firms, have enjoyed strong revenue multiples in recent years.
They have tracked the broader indices down, however, and remain in bear-market territory.Looking ahead, we&re entering earnings season during a period of intense economic uncertainty; how the stock market performs in the future will at least partially depend on how companies performed in Q1 2020, and what they project for the future.
Get ready.