Wall Street set to jump at open on hopes of potential coronavirus drugWall Street set to jump at open on hopes of potential coronavirus drug
FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City

By C Nivedita and Shreyashi Sanyal

(Reuters) – Wall Street looked set to jump at open on Wednesday after Gilead Sciences <GILD.O> reported an encouraging update on a potential COVID-19 treatment, while upbeat earnings reports from Google-parent Alphabet and Boeing boosted the mood.

Gilead Sciences Inc <GILD.O> jumped 9.3% in premarket trading after the drugmaker said its experimental antiviral drug remdesivir helped improve symptoms for COVID-19 patients who were given the drug early.

“The news on Gilead is really powering the market,” said Linda Duessel, senior equity strategist at Federated Hermes in Pittsburgh, Pennsylvania.

“While we wait for a vaccine, we are looking out for anything that will help us get back into society, and we’re all hanging on this data on a day-by-day basis.”

Alphabet Inc <GOOGL.O> jumped 8.7% as a drop in Google ad sales steadied in April and some consumers returned to using the search engine for shopping in addition to looking for coronavirus-related information.

Boeing Co <BA.N> reported a loss for the second straight quarter, but shares climbed 5.7% as the planemaker said it was confident of obtaining sufficient liquidity to fund its operations.

Wall Street’s main indexes closed lower on Tuesday as investors shifted out of growth stocks into more value-oriented cyclical companies.

However, the main indexes have recovered 30% from their lows in March, boosted by aggressive stimulus efforts and, more recently, hopes of an economic revival as states begin to relax lockdown measures.

But the latest data showed the U.S. economy contracted in the first quarter at its sharpest pace since the Great Recession, ending the longest expansion in history.

The Commerce Department said gross domestic product fell at a 4.8% annualized rate in the January-to-March period, while economists in a Reuters poll were expecting a contraction of 4%.

At 9:06 a.m. ET, Dow e-minis were up 459 points, or 1.91%. S&P 500 e-minis were up 51.75 points, or 1.8% and Nasdaq 100 e-minis were up 163.75 points, or 1.88%.

Analysts now expect S&P 500 earnings to decline 14.8% from a year earlier, a dramatic U-turn from the 6.3% year-on-year growth seen on Jan. 1, according to Refinitiv data.

General Electric Co <GE.N> fell 1.3% after its industrial businesses took a $1 billion hit to cash flow in the first quarter and warned the damage would worsen in the next three months.

Also up is a policy decision from the Federal Reserve and more corporate reports from technology heavyweight Microsoft Corp <MSFT.O>, social media giant Facebook Inc <FB.O> and electric car-maker Tesla Inc <TSLA.O> after the bell.

The Fed is slated to issue its policy statement at the end of its two-day meeting at 2 p.m. EDT (1800 GMT), where the central bank is expected to reiterate its promise to do whatever it takes to support the world’s largest economy.

(Reporting by C Nivedita and Shreyashi Sanyal in Bengaluru; Editing by Bernard Orr and Arun Koyyur)