U.S. stocks soared on Wednesday (March 4) on news of Joe Biden’s Super Tuesday results and a commitment by Congress to earmark $8 billion to fight the coronavirus.
“I do believe that if you had woken up this morning and Bernie Sanders was the presumptive nominee, the markets would not be reacting as they are today,” Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co., told The Wall Street Journal (WSJ).
The former vice president won the primary in 10 states, including Texas.
The Dow rallied 1,173.45 points, or 4.53%, to 27,090.86. The S&P 500 jumped 4.22% to 3,130.12. The Nasdaq Composite also surged 3.85% to 9,018.09.
The S&P 500 ended the day at 3130.12, up 4.2 percent, gaining 126.75 points. Healthcare stocks soared nearly 6 percent, leading all 11 market sectors. The Nasdaq Composite went up 3.9 percent to 9018.09.
The rally comes on the heels of market sell-offs and record lows made worse by the Federal Reserve’s emergency rate cut on Tuesday (March 3). The three indexes have not fully recovered and are down roughly 8 percent from their February records.
“There’s a more coordinated global effort to the fight the disease, with fiscal policy and allocations of resources — financial and human,” Randy Frederick, vice president of trading and derivatives for the Schwab Center for Financial Research, told the WSJ. “People are optimistic.”
Biden’s performance was also a favorable sign for investors worried about Sanders’s progressive ideas and Medicare-for-All. Healthcare stocks climbed, with some money managers referring to the increase as the “Biden bump.”
“Sanders’ win would be perceived as an increased risk for health insurers since he proposes a free comprehensive national health insurance program for all Americans, potentially leading to the elimination of the existing health insurance system,” CFRA Research analyst Sel Hardy said in a note, The Washington Post reported. “Biden, on the other hand, proposes a more moderate change to the private insurance system that will build on the Affordable Care Act, aiming to give more affordable choices on insurance plans, reducing health care costs, and making the health care system less complex.”
The stock market last week took its biggest hit since 2015 when the Chinese government devalued the yuan. The S&P 500 lost $1.737 trillion due to mounting fears over the coronavirus.
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