Stocks Tick Higher as Investors Look to Earnings, Economic Data
May 06 2020 - 8:58AM
Dow Jones News
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.
Futures tied to the S&P 500 rose 0.4%, suggesting that U.S.
stocks may edge up for a third day after the New York market opens.
The Stoxx Europe 600 benchmark edged up 0.1%. 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 including T-Mobile
US and General Motors report earnings.
CVS Health gained 3.8% premarket after it posted its latest
results and kept its earnings-per-share guidance for the full year
unchanged. Occidental Petroleum gained 5.7% 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.
Shares in Walt Disney retreated 2% premarket after the
entertainment company said profit plummeted over 90% in the fiscal
second quarter.
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 0.684%, from
0.656% on Tuesday, signaling a muted rise in investors' risk
appetite.
In commodities, Brent crude, the global benchmark, climbed 1.5%
to $31.40 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 Avantika.Chilkoti@wsj.com and
Frances Yoon at frances.yoon@wsj.com
(END) Dow Jones Newswires
May 06, 2020 08:43 ET (12:43 GMT)
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