Dow jumps 700 points on hope for a coronavirus treatment, closes at highest level since March

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Stocks surged on Friday after a report said a Gilead Sciences drug showed some effectiveness in treating the coronavirus, giving investors some hope there could be a treatment solution that helps the country reopen faster from the widespread shutdowns that have plunged the economy into a recession.

The Dow Jones Industrial Average rallied 704.81 points, or 3%, to 24,242.49. It was the Dow’s first close above 24,000 since March 10. The S&P 500 closed 2.7% higher, at 2,874.56 while the Nasdaq Composite advanced 1.4% to 8,650.14. ( Click here for the latest market news.)

Boeing shares jumped 14.7% after the airplane maker said it would resume production in the Seattle area as early as April 20. The company also said Friday it would resume operations in the Philadelphia area.

“It’s far too early to signal the all clear, but what this demonstrates is that coronavirus is a health problem that requires a health solution,” said Michael Arone, chief investment strategist at State Street Global Advisors, about the prospects of a coronavirus treatment. “If we can develop a health solution, I think at least from a market perspective, things will rebound pretty quickly.”

Friday’s gain led the S&P 500 to its first back-to-back weekly gains since early February and propelled it above its 50-day moving average. The broader market index climbed 3% for the week while the Dow gained 2.2%. The Nasdaq advanced 6.1% week to date. Through Friday’s close, the major averages were all up more than 25% from their late-March lows.

Gilead shares jumped 9.7% after STAT news reported that a Chicago hospital treating coronavirus patients with remdesivir in a trial were recovering rapidly from severe symptoms. The publication cited a video it obtained where the trial results were discussed.

“An effective treatment is a huge deal and would create a path to open the economy and resume normal ‘social activities’ way sooner than a vaccine,” said Tom Lee, head of research at Fundstrat Global Advisors. “A treatment is safer and more scalable because it is only given to people who need to be treated.”

Other studies have shown remdesivir to be an effective treatment against the coronavirus. However, they have been smaller in scale. Gilead itself also cautioned that anecdotal reports are not enough to determine yet whether the drug will be an effective treatment.

Still, CNBC’s Jim Cramer said the drug could give the economy a “fighting chance.”

“Remdesivir sounds like something that can get people out of hospitals quickly,” Cramer said in a tweet Thursday. “That allows our economy to have a fighting chance..I think that remdesivir would cut the morbidity … which would change how quickly we can open… and what we can do.”

Investors trimmed positions in work-from-home plays such as Amazon, Netflix and Walmart. Amazon dipped 1.4% while Netflix fell 3.7%. Walmart slid 0.2%. Still, Amazon and Netflix closed up more than 14% for the week while Walmart gained 8.5%.

Stocks tumbled from record highs in February into a bear market a month later as the spread of the coronavirus roiled market sentiment and the economic outlook. More than 2 million cases have been confirmed worldwide, including over 650,000 in the U.S., according to Johns Hopkins University. Governments urged people to stay home, effectively shutting down the global economy.

But the stock market has rallied since March 23 as new coronavirus cases in the U.S. and globally showed signs of plateauing. President Donald Trump said Thursday that “our experts say the curve has flattened and the peak … is behind us.”

He also issued guidelines to open up parts of the U.S. Thursday night, which identifies the circumstances necessary for areas of the country to allow employees to start returning to work. The decision to lift restrictions will ultimately be made by state governors.

The S&P 500 has jumped more than 30% from its March 23 intraday low while the Dow has gained 33.1% in that time.

To be sure, the outbreak has already dealt a massive blow to the economy. In four weeks, about 22 million Americans have lost their jobs. Retail sales posted last month their biggest fall on record.

Investors have said that news of an effective treatment or vaccine would be needed for stocks to mount a sustainable comeback.

“If it is effective in keeping someone from contracting the virus or, more likely, simply reduces its severity, that would be a game-changer and [would] allow the economy to restart both more quickly and more fully,” said Jim Paulsen, chief investment strategist at The Leuthold Group, about the Remdesivir trial report.

-CNBC’s Yun Li, Pippa Stevens, and Tom Franck contributed to this report. Click here for the latest news on the coronavirus. Subscribe to for exclusive insights and analysis, and live business day programming from around the world.