The former vice president captured nine states, including Texas, a showing that propelled him to the front of the race. Sanders may yet score the night’s biggest prize, California, where he is leading.
“Bernie Sanders’ socialist program includes lots of proposals to increase taxes and regulations, which would weigh on the economy and corporate earnings,” said Ed Yardeni, president of Yardeni Research. “The market’s sell-off last week on Sanders’ primary victories and rebound on Monday after Biden’s big win in South Carolina and this morning after Super Tuesday suggest that domestic U.S. politics may matter as much as the global health crisis to investors.”
The Dow Jones industrial average was up 2.5 percent in morning trading, while the Standard & Poor’s 500 index and tech-heavy Nasdaq rose more than 2 percent.
Stocks of healthcare companies roared in response to Biden’s performance. Cigna was up more than 10 percent in morning trading, while UnitedHealth Group rose nearly 12 percent. Humana jumped 1.25 percent and Anthem soared nearly 14 percent.
“The one-two punch thrown on Tuesday by the big Fed rate cut and the Biden win last night has put a floor under the stock market for now so investors are giving a huge sigh of relief and short-sellers are exiting stage left,” Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in commentary Wednesday. “The coronvirus market sell-off looks to be stabilizing.”
The World Health Organization said Tuesday that covid-19, the disease caused by the virus, has killed about 3.4 percent of those diagnosed with the illness — a higher rate than estimated previously. On Wednesday, the number of new coronavirus deaths reported outside China exceeded those reported inside the country — the center of the outbreak — for the first time.
Markets also were rattled as the yield on 10-year Treasury notes sank to an all-time low Tuesday. Bonds are a safe haven for investors in times of turmoil, and bond yields decrease as bond prices increase. Gold, another safe haven, climbed 2.9 percent Tuesday and has continued to rise, now trading at $1,647 per ounce.
“The 10-year treasury is a great barometer to measure fear,” Wayne Wicker, chief investment officer at Vantagepoint Investment Advisers, wrote in commentary Wednesday. “With a closing yield Tuesday at an all-time low of less than 1%, markets are reflecting a heightened amount of uncertainty related to the coronavirus and macroeconomic implications.”
European markets mirrored U.S. optimism Wednesday, with the benchmark Stoxx 600 index, Germany’s DAX and France’s CAC 40 all up more than 1.4 percent in midday trading. Britain’s FTSE 100 climbed 1.6 percent. Asian markets closed to mixed results, with Hong Kong’s Hang Seng closing down 0.25 percent and Japan’s Nikkei 225 weakly positive.
Panic around the coronavirus’s presence in the United States has spiked as the death toll reached nine, and new research revealed the virus had probably been spreading undetected in California and Washington for weeks. Americans are beginning to face disruption to their work and travel, and the list of major events canceled in the face of the outbreak grows by the hour. Many grocery stores and pharmacies report being cleaned out of bottled water, disinfectant products and shelf-stable and frozen foods.
Investors are looking forward to ADP payroll numbers and fresh manufacturing data Tuesday to further suss out the damage the coronavirus has done to the global economy. Analysts are predicting global economic growth could slow to the lowest levels since the financial crisis this quarter.