US STOCKS-Wall Street rallies on promising coronavirus drug

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* Gilead's COVID-19 treatment shows promise
* Fed leaves key interest rates near zero
* Fed chair Powell warns worst is ahead, vows continued
support
* Q1 GDP shows steepest contraction in 11 years
* Indexes up: Dow 2.21%, S&P 500 2.66%, Nasdaq 3.57%

(Updates to market close)
By Stephen Culp
NEW YORK, April 29 (Reuters) - U.S. stocks surged on
Wednesday as hopes for an effective COVID-19 treatment prompted
a broad rally and helped investors shrug off bleak GDP data and
words of warning from U.S. Federal Reserve Chair Jerome Powell.
Big tech companies provided the biggest lift to the S&P 500
and the Nasdaq, and pushed all three major U.S. stock averages
closer to their all-time highs reached in February.
All are well within 20% of their record levels, with the
tech-heavy Nasdaq now within 10% of its high.
Smaller companies, which stand to benefit more from
restrictions being lifted on a state-by-state basis, continue to
outperform their larger counterparts, with the Russell 2000
.RUT registering its sixth straight advance.
Drugmaker Gilead Sciences Inc GILD.O announced that its
drug remdesivir is showing promise as an effective COVID-19
treatment, giving a boost to the broader market and sending its
shares up 5.7%. The U.S. economy suffered its sharpest decline in 11 years,
with first-quarter GDP contracting at a 4.8% quarterly
annualized rate according to the Commerce Department, marking
the end of the longest U.S. economic expansion on record.
Many believe the worst is yet to come.
At the conclusion of its two-day monetary policy meeting,
the Fed left key interest rates near zero and Chair Jerome
Powell warned the economy will drop at an "unprecedented rate"
in the current quarter. But Powell also said the economy will pick up as
restrictions are lifted and vowed the central bank would
continue to support the recovery.
"(The Fed has) really put themselves in the forefront of
trying to lead this recovery back," said Rick Meckler, partner
at Cherry Lane Investments in New Vernon, New Jersey. "They have
been aggressive and probably are a big reason for some of the
strength the market has shown even in light of some really
negative economic news."
The Dow Jones Industrial Average .DJI rose 532.31 points,
or 2.21%, to 24,633.86, the S&P 500 .SPX gained 76.12 points,
or 2.66%, to 2,939.51 and the Nasdaq Composite .IXIC added
306.98 points, or 3.57%, to 8,914.71.
Of the 11 major sectors in the S&P 500, all but utilities
.SPLRCU and consumer staples .SPLRCS ended the session in
the black, with energy companies .SPNY enjoying the largest
percentage gain.
Earnings season has hit full-stride, with 192 of the
companies in the S&P 500 having reported. Of those, 64.6% have
beaten consensus estimates, according to Refinitiv data.
In aggregate, first-quarter S&P 500 earnings are seen
dropping 15.1 percent from a year ago, a stark reversal from the
6.3% annual growth forecast on Jan. 1, per Refinitiv.
Google parent Alphabet Inc GOOGL.O jumped 8.9% after the
company reported steady advertising sales and a 13% year-on-year
revenue increase. Boeing Co BA.N shares surged 5.9% after the planemaker
announced it would shrink its workforce and production to
contend with plunging demand. Ride share company Lyft Inc LYFT.O plans to cut 17% of its
workforce, according to a Reuters exclusive. Its shares were up
4.0%. Facebook Inc FB.O rose about 8%, whiles shares of both
Microsoft Corp MSFT.O and Tesla Inc TSLA.O gained nearly 2%
in after-market trading following their earnings reports.
Advancing issues outnumbered declining ones on the NYSE by a
6.73-to-1 ratio; on Nasdaq, a 4.29-to-1 ratio favored advancers.
The S&P 500 posted 6 new 52-week highs and no new lows; the
Nasdaq Composite recorded 42 new highs and 1 new lows.
Volume on U.S. exchanges was 12.71 billion shares, compared
with the 12.28 billion average over the last 20 trading days.