CNBC's "Squawk on the Street" team discusses the Federal Reserve's emergency rate cut in response to the coronavirus outbreak with David Rosenberg of Rosenberg Research and Ed Campbell, QMA portfolio manager. Stocks surged on Wednesday as major victories from former Vice President Joe Biden during Super Tuesday sparked a massive rally within the health-care sector.
The Dow Jones Industrial Average soared 1,173.45 points higher, or 4.5%, to 27,090.86. The S&P 500 jumped 4.2% to 3,130.12, while the Nasdaq Composite advanced 3.8% to 9,018.09. The Dow posted its second-highest point gain ever, and it was the second time in three days that the 30-stock average swung 1,000 points or higher.
With Wednesday’s rally, all three major averages moved out of correction territory, meaning they are now less than 10% down from their 52-week highs. The tech-heavy Nasdaq also turned positive on the year, up 0.5% in 2020.
Biden scored key primary victories in states including North Carolina, Texas and Arkansas, giving his campaign momentum and increasing his odds of being the Democratic Party’s presidential nominee. Many investors applaud Biden for his middle-of-the-road tack in contrast to the more progressive policies of Sanders, I-Vt., and Sen. Elizabeth Warren, D-Mass.
Tuesday’s primary results sent health-care stocks flying. The S&P health care sector surged 5.8%, posting its best day since 2008. UnitedHealth and Centene jumped 10.7% and 15.6%, respectively. Shares of UnitedHealth had their biggest one-day gain since 2008.
The major averages also got a boost from strong economic data. The U.S. services sector expanded at a faster-than-expected pace in February, data from the Institute for Supply Management showed. ADP and Moody’s Analytics said private payrolls jumped by 183,000 last month, topping expectations. Lawmakers also struck a deal on more than $8 billion in emergency coronavirus funding.
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