OXY Occidental Petroleum Corporation

By Caitlin McCabe, Avantika Chilkoti and Frances Yoon 

U.S. stocks swung between small gains and losses Wednesday as investors continue to try to untangle data and corporate earnings to determine what the economy might look like in the months ahead.

The S&P 500 gained less than 0.1% in mid-day trading in a choppy session. The Dow Jones Industrial Average was down about 15 points, or less than 0.1%. Both indexes opened modestly higher, before giving up most of their gains.

Only the Nasdaq Composite was solidly higher for the day, up 1.1%, driven higher by a continued rally in technology stocks.

Despite Wednesday's volatile trading, U.S. stocks have risen this week as investors look toward the continued lifting of stay-at-home orders. Several states have already begun to reopen their economies and others are formulating plans to do the same. President Trump in particular has been eager for the economy to return to pre-coronavirus operations.

Yet even as some traders remain optimistic, much about the country's future remains unknown. The number of coronavirus cases in the U.S. continues to rise, and many have warned that there could be a resurgence of cases as life returns to normal. Executive commentary, meanwhile, hasn't offered investors reassurance either, as companies have continued to report massive profit declines, dividend cuts and layoffs during first-quarter earnings season.

Still, stocks remain up for the week, even as some market observers question what could be ahead.

"That's the big question: Is the market getting ahead of itself here?" said Andy Sparks, MSCI's head of portfolio management research. "As the lockdowns ease, the doors to the restaurants may be opening, but how many customers are going to come in?"

"I think with a lot of the announcements that we see, there is this large amount of uncertainty hanging over the markets' head," he continued.

The technology sector helped mitigate losses, with Match Group up 7.6% after the online-dating company said in a letter to shareholders Tuesday that it had seen a "noticeable increase" in activity among users across its brands and geographies. Netflix added 2.2%, continuing its rapid climb upward for the year.

And even as seven of the S&P 500's 11 sector posted declines, there were breakouts within industries. Shares of General Motors jumped 4.1% after it became the only Detroit car company to post a profit for the first quarter.

And CVS Health climbed 3.2% after its earnings easily topped analyst expectations.

But there were also losses after disappointing earnings, too. Occidental Petroleum fell 7.9% after it reported a first-quarter loss. The Wall Street Journal reported Tuesday that the energy producer is exploring ways to reduce its roughly $40 billion debt load following a historic plunge in oil prices.

Walt Disney, meanwhile, ticked up slightly, rising 0.6% in the afternoon after trading lower for most of the morning. 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.

Investors will also be looking later this week for new unemployment claims data on Thursday, as well as the results from the April employment report released by the U.S. Department of Labor Friday. More than 30 million people have sought unemployment benefits since mid-March, and more claims are expected. It remains unclear how quickly companies can begin re-hiring employees once economies re-open.

"It is hard to say just how fast the economy will bounce back," said Patrick Spencer, managing director at U.S. investment firm Baird. "There are so many unknowns over the length of Covid and how consumers will behave once the economy begins to reopen."

In bond markets, the yield on the 10-year U.S. Treasury rose to 0.717%, from 0.656% on Tuesday. Yields rise as bond prices fall.

And in commodities, Brent crude, the global benchmark, dropped 6.4% to $28.99 a barrel, extending its recent volatile stretch.

In Europe, the Stoxx Europe 600 benchmark ticked down 0.4%. China's Shanghai Composite Index closed up 0.6% after a five-day holiday and Hong Kong's Hang Seng Index rallied 1.1%.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com, Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Frances Yoon at frances.yoon@wsj.com

(END) Dow Jones Newswires

May 06, 2020 12:56 ET (16:56 GMT)

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