Stocks Edge Down as Investors Look to Earnings, Economic Data

By Avantika Chilkoti and Frances Yoon 

U.S. stocks gave back early gains 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 fell 0.1% after the opening bell, on track for its third day of gains. The Dow Jones Industrial Average lost about 35 points, or 0.1%, and the Nasdaq Composite increased 0.4%.

U.S. stocks have been rising this week as investors continue to feel optimistic about the reopening of local economies.

Still, however, they are keeping a careful eye on first-quarter earnings -- and any commentary on the outlook for the rest of this year.

Shares of General Motors jumped 9% after the auto maker posted a profit on strong truck sales.

CVS Health climbed 3.2% after it posted its latest results and kept its earnings-per-share guidance for the full year unchanged. And Occidental Petroleum jumped 3.4% after its latest result Thursday. The energy producer is exploring ways to reduce its roughly $40 billion debt load, The Wall Street Journal reported.

Walt Disney, however, slipped 1.8% after the world's largest entertainment company said late Tuesday that the coronavirus pandemic took a $1.4 billion bite out of its earnings.

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. Still, the nonfarm private sector in the U.S. lost about 20.2 million jobs from March to mid-April.

The U.S. Department of Labor is expected to release its April employment report on Friday.

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 0.709%, from 0.656% on Tuesday, signaling a muted rise in investors' risk appetite.

In commodities, Brent crude, the global benchmark, dropped 2.1% to $30.31 a barrel, following weeks of wild swings in energy markets.

In Europe, the Stoxx Europe 600 benchmark was up 0.1% China's Shanghai Composite Index closed up 0.6% after a five-day holiday and Hong Kong's Hang Seng Index rallied 1.1%.

-- Caitlin McCabe contributed to this report.

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

(END) Dow Jones Newswires

May 06, 2020 10:34 ET (14:34 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.