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Stocks roar back as Biden takes the lead

Credit: Reuters Studio
Published on March 4, 2020 - Duration: 02:30s

Stocks roar back as Biden takes the lead

Stocks on Wall Street surged more than 4% on Wednesday after former Vice President Joe Biden's strong showing in the Super Tuesday Democratic primary contests.

Conway G.

Gittens reports.

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Stocks roar back as Biden takes the lead

Wall Street powered ahead Wednesday - posting only its second gain in 10 sessions - Investors were seemingly encouraged after Joe Biden took the lead from Bernie Sanders in the race to become the Democratic presidential nominee.

Nowhere did that show up more than in healthcare stocks.

Biden's healthcare proposals are seen as more friendly to the industry than a pledge by Sanders' to scrap private health insurance.

United Health Group had its biggest one-day rally since the financial crisis.

That strength contributed to a 1,173-point surge in the Dow.

The S&P 500 rose 126 .

The tech heavy Nasdaq jumped 333.

Mark Newton of Newton Advisors thinks the market was due for a bounce, but history suggests, this rebound will likely be challenged.

SOUNDBITE (ENGLISH): MARK NEWTON, CHIEF TECHNICAL ANALYST, NEWTON ADVISORS, SAYING: "Specifically, because the first two months of the year were down, looking back over the last 70 years, when both January and February tend to be negative, it's happened 10 to 11 times and each time since 1950, the market's been down for the year.

So I'm of really heightened alert of the chance for a down market for this year." Nevertheless, Wednesday's stock market surge came one day after the Federal Reserve surprised markets with the biggest emergency rate cut since the financial crisis.

The Fed said the extraordinary move was necessary to protect the economy from coronavirus weakness...though intitially, the move didn't help stocks.

But Wednesday - investors focused on new economic data, which provided relief to economic angst.

The Institute for Supply Management's services sector index regained strength in February, hitting a one-year high... And private hiring was stronger than expected last month, according to payroll company ADP.

But coronavirus fears haven't totally disappeared: Yields on 10-year U.S. government stayed below 1 percent for most of the session - - a sign there are still investors out there who fear a possible recession... And the International Monetary Fund downgraded its global economic outlook as the virus spreads.

IMF Managing Director Kristalina Georgieva now expects growth to be slower than last year, but fell shy of warning of a recession.

The fund is making $50 billion available in emergency loans to help poorer countries respond to the epidemic.

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