Stocks Open Higher as Investors Look to Earnings, Economic Data

By Avantika Chilkoti and Frances Yoon 

Global stocks drifted higher Wednesday as investors look to key pieces of economic data and the prospects for the world's biggest businesses to gauge the impact of the coronavirus pandemic.

The S&P 500 rose 0.6% in early New York trading as the index started what could be a third straight day of gains. The Dow industrials added 153 points, or 0.7%, while the Nasdaq Composite Index advanced 0.8%.

Earlier, the Stoxx Europe 600 benchmark was flat. China's Shanghai Composite Index closed up 0.6% after a five-day holiday, while Japan remained shut.

Investors will be looking for commentary on the outlook for the rest of this year when major U.S. corporations report earnings.

Shares of General Motors jumped 6.3% premarket after the auto maker posted a profit on strong truck sales.

CVS Health gained 3.9% premarket after it posted its latest results and kept its earnings-per-share guidance for the full year unchanged. Occidental Petroleum gained 1.7% ahead of the opening bell after its latest result Thursday. The energy producer is exploring ways to reduce its roughly $40 billion debt load, The Wall Street Journal reported.

Lyft and PayPal Holdings are among the companies scheduled to disclose results after the close in New York.

The U.S. nonfarm payroll data for April from ADP, a gauge of private-sector employment in the world's largest economy, on Wednesday registered a slightly smaller drop in payrolls than expected. The government's April employment disclosure comes on Friday, and economists surveyed by The Wall Street Journal forecast the jobs report will show that employers shed 22 million nonfarm payroll jobs.

Markets continue to reflect caution about the prospects for the global economy and the potential for more fatalities from coronavirus as some countries experiment with easing restrictions on business and social activity.

"The U.S. economy is reopening, that's what's given this new sentiment lift," said Patrick Spencer, managing director at U.S. investment firm Baird. "But it is hard to say just how fast the economy will bounce back. There are so many unknowns over the length of Covid and how consumers will behave once the economy begins to reopen."

President Trump on Tuesday said his administration is considering disbanding the White House's coronavirus task force, even as the virus continues to spread around the U.S. A key model projected that the current number of U.S. deaths could nearly double by this summer.

"He's trying to make the case we can get back to this Goldilocks scenario quickly if we all pitch in and I think people will be scared," said Gregory Perdon, co-chief investment officer at Arbuthnot Latham. "Nobody will be running out and buying a brand-new television in the next few months."

The yield on the 10-year U.S. Treasury rose to 0.715%, from 0.656% on Tuesday, signaling a muted rise in investors' risk appetite.

In commodities, Brent crude, the global benchmark, dipped 2.7% to $30.12 a barrel, following weeks of wild swings in energy markets.

In the Asia-Pacific region, Australia's S&P/ASX 200 benchmark closed down 0.4% and Hong Kong's Hang Seng Index rallied 1.1%.

Write to Avantika Chilkoti at [e-mail] and Frances Yoon at [e-mail]

(END) Dow Jones Newswires

May 06, 2020 09:46 ET (13:46 GMT)

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