Futures jump on Trump's restart plan, coronavirus drug hopes

[April 17, 2020]  By Medha Singh

(Reuters) - U.S. stock index futures bounced more than 2% on Friday as President Donald Trump laid out plans to re-open an economy shut down by the coronavirus outbreak and on reports of encouraging data on a drug to potentially treat COVID-19.

Gilead Sciences Inc's <GILD.O> shares surged 10.7% in premarket trading following a media report that patients with severe symptoms of the disease had responded positively to its experimental drug, remdesivir.

The benchmark S&P 500 <.SPX> is now set for its third weekly gain in four, on the back of a raft of global stimulus and hopes that statewide lockdowns would be eased as the virus outbreak showed signs of ebbing.

Late on Thursday, Trump announced new guidelines to re-open the economy in a staggered, three-stage process, but the plan was a set of recommendations rather than orders and left the decision largely up to state governors.

"With news of a potential beneficial treatment on the same day that Trump laid out plans to re-open the U.S. economy, there is a clear optimism over the possibility that some semblance of normality could soon return," Joshua Mahony, senior market analyst at IG in London wrote in a note.

At 7:39 a.m. ET, Dow e-minis <1YMcv1> were up 717 points, or 3.06%, S&P 500 e-minis <EScv1> were up 77.5 points, or 2.78% and Nasdaq 100 e-minis <NQcv1> were up 170.25 points, or 1.95%.

The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., April 13, 2020. REUTERS/Andrew Kelly

Big U.S. lenders rebounded in premarket trading with Bank of America Corp <BAC.N>, Citigroup Inc <C.N> and JPMorgan Chase & Co <JPM.N> rising between 4.3% and 5.4% after being hammered this week on reporting several billion dollars in reserves to cover potential loan defaults.

The risk-on sentiment pushed Wall Street's fear gauge <.VIX> below 40, but the S&P 500 is still about 20% away from reclaiming its record high and evidence of a severe economic slump is piling up.

With large-scale production halts putting millions out of work, U.S. jobless claims touched 22 million in the past month, while China's economy contracted for the first time in nearly three decades in the first quarter.

Schlumberger NV <SLB.N> said it recorded an $8.5 billion charge in the first quarter, as the world's top oilfield services provider slashed the value of some of its units following a collapse in oil prices. Its shares rose 5.7%.

Boeing Co <BA.N> soared 8.5% on plans to resume commercial airplane production next week in Washington state after suspending operations last month due to the pandemic.

Procter & Gamble Co <PG.N> rose 0.2% after the consumer products maker posted a 5% rise in the third-quarter sales as consumers stocked up on essentials.

(Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Sagarika Jaisinghani and Shounak Dasgupta)

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