Wall Street Gains On Optimism Over Easing Lockdowns
(Reuters) - Wall Street's main indexes rose on Wednesday on hopes of a pickup in business activity as states eased coronavirus-induced curbs, with investors also looking past a stunning 20 million plunge in U.S. private payrolls last month.
Five of the 11 major S&P sectors were trading higher, with the technology index (SPLRCT) leading gains as traders bought into stocks perceived to be resilient at a time when billions of people globally are still locked indoors.
U.S. stock indexes are now on course to gain for three straight sessions, building on a rally in April that was sparked by unprecedented stimulus and signs that the outbreak was peaking.
However, with macroeconomic data still foreshadowing a severe global recession, analysts have warned of another selloff, particularly if reopening of economies sparks another wave of infections.
Data on Wednesday showed U.S. private employers laid off a record 20.236 million workers in April, setting up the overall labor market for historic job losses last month.
The Labor Department's more comprehensive report is due Friday, while a reading of initial jobless claims is set to be released on Thursday.
"We knew this was going to be bad so it matches the jobless claims. A lot of the bad news for April is pretty much factored in," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"But markets are looking at a potential recovery here, we've got a lot of states opening up. Businesses are starting to get going again, but the question is, is it too fast?"
At 10:45 a.m. ET the Dow Jones Industrial Average (DJI) was up 60.78 points, or 0.25%, at 23,943.87, the S&P 500 (SPX) was up 10.94 points, or 0.38%, at 2,879.38 and the Nasdaq Composite (IXIC) was up 97.84 points, or 1.11%, at 8,906.96.
The S&P financials index (SPSY) was among the biggest decliners as the Treasury Department said it would launch a long-planned 20-year bond to meet record government borrowing needs amid the outbreak.
In company news, General Motors Co (N:GM) jumped 6.3% after the automaker topped first-quarter profit expectations and outlined plans for a May 18 restart of most of its North American plants.
CVS Health Corp (N:CVS) gained 2.6% after the company posted a better-than-expected first-quarter profit, as its pharmacy benefits management business and its drugstores benefited from customers stockpiling medicines due to COVID-19 lockdowns.
Activision Blizzard Inc (O:ATVI) rose 4.9% after raising its revenue forecast on higher demand for video games such as its "Call of Duty" amid lockdowns.
Walt Disney Co (N:DIS) added 3.7% after the company said it would reopen Shanghai Disneyland to a reduced number of visitors next week, even as it estimated a $1.4 billion hit to profit.
Advancing issues almost matched decliners on the NYSE and the Nasdaq. The S&P index recorded four new 52-week highs and two new lows, while the Nasdaq recorded 34 new highs and 11 new lows.
Source: Investing by Shreyashi Sanyal and Medha Singh
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