US stocks open higher, oil price rebounds as lockdowns ease
Reopening rally stretches from Hong Kong to New York
(30 minutes later)
NEW YORK — Stocks are opening higher on Wall Street Tuesday and crude oil prices are rising as more places ease restrictions on business and public life, raising hopes for a recovery from a historic economic plunge. The S&P 500 rose 1% in early trading. Technology stocks rose more than the rest of the market. Traders were relieved to see another rise in the price of crude oil. The price had crashed in recent weeks as demand for energy collapsed because of shutdowns and travel restrictions meant to slow the spread of the coronavirus.
Stocks rallied worldwide on Tuesday as more countries relaxed restrictions on businesses, raising hopes for a recovery from the historic plunge sweeping the global economy.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:
The S&P 500 rose 1.5% in the first few minutes of trading following similar gains in Paris, London and Hong Kong. Crude oil also continued its mini-rally after falling to record lows late last month.
World stock markets and the price of oil rose on Tuesday as more countries eased restrictions on business and public life, raising hopes for a recovery from a historic economic plunge.
In California, some retail businesses could begin serving customers again as early as Friday, under some restrictions. Many European countries have also begun relaxing strict orders meant to slow the spread of the coronavirus outbreak, while waiting to see if it leads to a rise in infections. In Asia, the first pitches of the South Korean baseball season thwacked into catchers’ mitts, albeit in stadiums with no fans in attendance.
Shares advanced in Paris, London and Hong Kong and Wall Street futures suggested a rise on the open. Markets in Tokyo, Shanghai and Seoul were closed for holidays.
Many European countries that have seen new infections tapering off amid strict social distancing measures and nationwide lockdowns have begun relaxing some restrictions while watching to see whether numbers began to rise again. In Asia, China and South Korea were slowly resuming public events after months of containment efforts.
Meanwhile, the U.S. is also taking halting steps to lift some restrictions imposed amid its outbreaks, even as thousands of new cases are reported each day.
“It is hard to be a raging pessimist when lockdowns are lifting in the next few weeks,” Stephen Innes of AxiCorp said in a commentary.
“It is hard to be a raging pessimist when lockdowns are lifting in the next few weeks,” Stephen Innes of AxiCorp said in a commentary.
Germany’s DAX rose 1.3% to 10,597, while the CAC 40 in Paris gained 1.4% to 4,438. Britain’s FTSE 100 advanced 1.3% to 5,827. U.S. markets looked poised to extend gains, with the future for the S&P 500 and for the Dow industrials both adding 1%.
The Dow Jones Industrial Average was up 334 points, or 1.4%, at 24,084 , as of 9:55 a.m. Eastern time. The Nasdaq was up 1.6%.
Moves toward restarting economies stalled by lockdowns have raised hopes for a recovery in demand for oil, among other commodities. Crude prices plunged last month as a price war between Russia and Saudi Arabia further roiled the market. At one point, U.S. benchmark crude was priced so low that producers would have been paying customers to take the oil away.
Hopes that reopening economies will eventually lead to a pickup demand also helped oil prices rally further. A barrel of U.S. oil to be delivered in June rose 16.5% to $23.75. It’s been generally climbing since hitting a low of $6.50 late last week. It’s still well below the roughly $60 that it cost at the start of the year after plunging on worries that the collapse in oil demand would lead to topped-out storage tanks with nowhere left to put spare crude.
U.S. benchmark crude added $2.06 to 22.45 per barrel in electronic trading on the New York Mercantile Exchange. It climbed 61 cents on Monday. The price of U.S. crude started the year at about $60 per barrel. Its decline is crushing many American producers.
Brent crude, the standard for international pricing, gained 11.9% to $30.44 per barrel.
Brent crude, the standard for international pricing, picked up $2.07 to $29.27 per barrel.
“The feeling on the floor is that energy is in a better spot, and while it’s not brilliant,“ the gulf between oil supplies and demand “is starting to shift in a more positive direction,” Chris Weston of Pepperstone said in a report.
“The feeling on the floor is that energy is in a better spot, and while it’s not brilliant, the supply/demand equation is starting to shift in a more positive direction,” Chris Weston of Pepperstone said in a report.
That helped energy stocks in the S&P 500 climb 3.5% for the biggest gain among the 11 sectors that make up the index. National Oilwell Varco rose 6.5%, and Occidental Petroleum gained 6.2%.
Interest was shifting to July futures for U.S. crude, Weston said. The current benchmark is for June delivery.
Technology stocks also continued their strong run, and Apple and Microsoft both rose at least 1.5%. That’s big for the S&P 500 because those two companies alone account for 11% of the entire index’s market value.
“Brent crude is also having a better time of it and the $30-level is a clear target,” he said.
The market’s gains were widespread, though. More than 90% of the stocks in the S&P 500 were up. And the small stocks in the Russell 2000 index were doing even better than their larger rivals, a sign of rising expectations for coming economic growth. The Russell 2000 was up 2.7%.
In share trading, Hong Kong’s Hang Seng added 1.1% to 23,868.66 as the government said it would relax some social distancing measures, allowing certain businesses such as gyms, cinemas and beauty salons to re-open and doubling the number of individuals allowed at public gatherings to a maximum of eight.
In Europe, Germany’s DAX rose 2%, the CAC 40 in Paris gained 2.1% and the FTSE 100 in London rose 2%.
In Australia, the S&P/ASX 200 climbed 1.6% to 5,407.10 as the central bank kept its benchmark interest rate at a record low 0.25%. India’s Sensex bounced back from a plunge on Monday to gain 0.3% to 31,805.25. Singapore’s benchmark jumped 1.6%, while Bangkok’s fell 1.6%.
Hong Kong’s Hang Seng added 1.1% as the government said it would relax some social distancing measures, allowing certain businesses such as gyms, cinemas and beauty salons to reopen and doubling the number of individuals allowed at public gatherings to a maximum of eight. Markets in Tokyo, Shanghai and Seoul were closed for holidays.
This is another busy week for markets, with a slew of corporate earnings reports due, including more than 150 companies in the S&P 500. On Friday, the government will also show how many jobs were lost during April.
In another sign of a bit less pessimism in the market, the yield on the 10-year Treasury note rose to 0.67% from 0.63% late Monday. Treasury yields tend to rise when investors are upgrading their expectations for the economy and inflation. But it’s still well below the 1.90% it yielded at the start of the year.
In other trading, the yield on the 10-year Treasury note rose to 0.66% from 0.64% on Monday. It‘s still well below the 1.90% it yielded at the start of the year. Yields tend to fall when investors are downgrading their expectations for the economy and inflation.
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The dollar was at 106.70 Japanese yen, down from 106.75 yen on Monday. The euro weakened to $1.0840 from $1.0860, erasing earlier gains after a German court cast doubt on the European Central Bank’s main monetary stimulus program. The court asked the ECB to justify its program within three months, a move that analysts say could raise some longer-term questions about the central bank’s effectiveness.
AP Business Writer Elaine Kurtenbach contributed.
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.
