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Stocks open higher on Wall Street as nations look to reopen Wall Street’s rally carries into 3rd day as economies reopen
(32 minutes later)
NEW YORK — Stocks are opening higher on Wall Street as nations and some U.S. states move toward reopening their economies from lockdowns made to restrict the spread of the coronavirus. The S&P 500 rose 1.4% in the first few minutes of trading Tuesday. Markets are broadly higher in Europe and closed mostly higher in Asia. Investors are also focusing on the earnings reports that big U.S. companies will be reporting this week. Google parent company Alphabet and Starbucks report their latest results after the closing bell. U.S. crude oil prices fell again on concern about oversupply and a lack of storage space. Stocks are pumping higher in early trading on Wall Street Tuesday, and the S&P 500 is cruising toward its first three-day winning streak in a month.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below: European stocks were also strong, as markets turned higher following a mixed Asian performance. The price of U.S. oil remained wild, though, and it swung through more extremes as storage tanks come closer to hitting their limits.
Stock markets turned higher Tuesday after a mixed session in Asia as governments inch toward letting businesses reopen and central banks step in with still more support for ailing economies. The price of oil, however, extended its losses. With massive aid in place for the economy from central banks and governments, stocks have been building higher in recent weeks on anticipation that stay-at-home orders will gradually lift. U.S. states and nations around the world are going at their own speeds, but the removal of restrictions would allow businesses to get back into some type of gear, even if it’s only first, after the global economy essentially slammed shut.
From Rome, Georgia, to Rome, Italy, companies are watching as politicians detail plans to ease up on restrictions that were meant to slow the coronavirus pandemic but also have erased businesses and jobs. The S&P 500 was up 0.8%, as of 10:05 a.m. Eastern time. The Dow Jones Industrial Average gained 213 points, or 0.9%, to 24,347, and the Nasdaq was up 0.3.%
With central banks and governments promising huge amounts of aid for the economy, some investors are focusing on the potential return of growth as the outbreak levels off in some areas. Companies that would benefit most from people being able to leave their houses again were among the market’s leaders. Harley-Davidson jumped 16% after laying out plans to slash costs and preserve cash, including a cut of its dividend and a halt to its stock buyback program. Kohl’s rose 12%, and Kimco Realty, which owns shopping centers, added 8.8%
In Europe, France’s CAC 40 gained 1.3% to 4,563, while Germany’s DAX rose 1.5% to 10,817. Britain’s FTSE 100 gained 1.5% to 5,934. Sectors of the stock market that are most closely tied to the strength of the economy were also leaders. Financial stocks rose 3% for the biggest gain among the 11 sectors that make up the S&P 500. Industrial stocks were close behind with a gain of 2.7%, and raw-material producers were up 2.1%.
U.S. shares were set to drift higher with Dow futures adding 1.3% and S&P 500 futures gaining 1.2%. Still, signs of caution are prevalent throughout the market. Merck reported a jump in revenue and profit for the first quarter, but the drugmaker also cut its financial forecast for the full year. It said prescription drug sales will likely fall because because the pandemic is keeping many patients with chronic conditions away from their doctors. It’s also looking for sales of veterinary medicines to dip. Its shares fell 4.2%.
Japan’s benchmark Nikkei 225 surged Monday after the central bank lifted its ceiling on purchases of government bonds and other assets that it uses to pump more cash into the economy. It edged 0.1% lower Tuesday, to close at 19,771.19. Treasury yields, which had sent warning signals about the disastrous economic effects of the pandemic long before the stock market did, were down slightly.
“Yesterday’s Bank of Japan ‘Whatever it takes’ announcement could be viewed positively by investors,” said Robert Carnell, regional head of research, Asia Pacific, at ING, of the Bank of Japan’s monetary easing Monday. “Basically, the monetary spigots are wide open.” The yield on the 10-year Treasury dipped to 0.63% from 0.65% late Monday. Yields tend to fall when investors are downgrading expectations for the economy and inflation.
Elsewhere in Asia, South Korea’s Kospi gained 0.6% after fluctuating much of the day, to 1,934.09. Australia’s S&P/ASX 200 lost 0.2% to 5,313.10. Hong Kong’s Hang Seng rose 1.2% to 24,575.96, while the Shanghai Composite fell 0.2% to 2,810.02. Inflation recently has gotten weighed down by a plunge in oil prices. With airplanes, autos and factories around the world idled, demand has collapsed for energy, and producers have not cut back quickly enough. All the extra oil has flowed into storage tanks, which are close to hitting their limits. A barrel of U.S. oil for delivery in June was up 2% to $13.06, but it had dropped as low as $10.07 earlier in the morning.
The U.S. Federal Reserve is holding its own monetary policy meeting Tuesday and Wednesday, though it is not expected to add to the huge amounts of stimulus it has already deployed, though investors will be keen for more detail on the economic outlook. Brent crude, the international standard, was up 1.3% at $23.37 per barrel.
The European Central Bank will hold its own meeting Thursday, and is likewise expected to mainly fill in details of its stimulus programs, or possibly tweak them, as it keeps an eye on a historic plunge in the economy In Europe, France’s CAC 40 gained 1.6% while Germany’s DAX rose 1.8%7. Britain’s FTSE 100 gained 2.1.
Japan’s benchmark Nikkei 225 edged 0.1% lower. A day before, it surged after Japan’s central bank lifted its ceiling on purchases of government bonds and other assets that it uses to pump more cash into the economy.
“Basically, the monetary spigots are wide open,” said Robert Carnell, regional head of research, Asia Pacific, at ING.
South Korea’s Kospi gained 0.6%, and Hong Kong’s Hang Seng rose 1.2%.
The U.S. Federal Reserve is holding its own monetary policy meeting Tuesday and Wednesday, though it is not expected to add to the huge amounts of stimulus it has already deployed.
The European Central Bank will hold its own meeting Thursday, and is likewise expected to mainly fill in details of its stimulus programs, or possibly tweak them.
Worries persist about new surges of coronavirus cases in places like China and South Korea, where they had declined as a result of social distancing, testing and arduous efforts by medical workers.Worries persist about new surges of coronavirus cases in places like China and South Korea, where they had declined as a result of social distancing, testing and arduous efforts by medical workers.
Japan’s government is warning against travel during the Golden Week holidays, which start this week and extend into early May, the biggest holiday for the nation after the New Year’s holidays.
There is no lockdown in Japan but the government has declared a state of emergency, requesting that people stay home. That lasts through Golden Week, but it may be extended.
A slew of corporate earnings announcements is lined up for this week.A slew of corporate earnings announcements is lined up for this week.
Nearly a third of the companies in the S&P 500 are scheduled to report how profitable, or otherwise, they were in the first three months of 2020 and, more importantly, perhaps talk about how they see future conditions shaking out. That includes the Big Five of Amazon, Apple, Facebook, Microsoft and Google’s parent, Alphabet, which together make up about a fifth of the index. Nearly a third of the companies in the S&P 500 are scheduled to report their results for the first three months of 2020 and, more importantly, perhaps talk about how they see future conditions shaking out. That includes Amazon, Apple, Facebook, Microsoft and Google’s parent, Alphabet, which together make up about a fifth of the index.
On Tuesday, Nissan Motor Co. said it expects to log a net loss of up to 95 billion yen ($880 million) for the full fiscal year that ended in March, much lower than its earlier estimate for a 65 billion yen net profit. The company also pushed back its report for full year earnings to May 28 from mid-May. ___
In Europe, oil producer BP reported a slide in earnings that reflected the drops in energy markets, while HSBC bank set aside more money to cover potential defaults on loans it had issued as a result of the economic slump. AP Business Writer Yuri Kageyama contributed.
In energy markets, the benchmark for U.S. oil extended its losses, dropping $1.39 to $11.39 a barrel in electronic trading on the New York Mercantile Exchange. That added to a drop of $4.16 a barrel on Monday as investors worry about oversupply at a time when storage space for crude is scarce. Brent crude, the international standard, fell 10 cents to $22.97 a barrel.
The dollar slipped to 106.61 Japanese yen from 107.20 yen. The euro gained to $1.0886 from $1.0829.
Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.