Stocks rose Wednesday after a batch of corporate earnings results topped consensus expectations and the Senate passed of a deal to inject more fiscal stimulus into the economy.
The S&P 500 jumped more than 2%, recovering some of the prior day’s declines as the Information Tech and Energy sectors outperformed. The Nasdaq jumped more than 2.8%, with shares of tech heavyweight Facebook (FB) rising more than 6.5%. Netflix’s (NFLX) stock turned lower after the company announced a new $1 billion debt offering, a day after reporting a massive surge in new subscribers during the first quarter.
Tuesday afternoon, the U.S. Senate cleared an interim deal to add another $484 billion infusion for its small business aid program, coronavirus testing and hospital support package, with a House vote expected as soon as Thursday. President Donald Trump has already suggested he would sign the bill once it arrives at his desk. The funds add to the $2.2 trillion relief package initially Congress passed in late March.
“Though this bill will address some of the shortfalls, this will not likely be the end for stimulus,” Bank of America analysts wrote in a note Wednesday morning. “We think Congress will next pass a bill which expands on many provisions in the CARES Act and addresses State and Local budget shortfalls. We expect up to $1.5tn [trillion] more in stimulus, which would bring the total stimulus passed this year to $4tn or 20% of GDP.”
The additional funding comes as much of the country remains shut inside due to strict social distancing guidelines, which have left many businesses idled. Still, some southern states this week began allowing people to return to public spaces and businesses, with some restrictions, jump-starting a multi-phase economic reopening process.
Investors also continued to closely watch updates in energy markets, as supply and demand concerns compounded with storage challenges for the physical commodity.
The June contract (CL=F) for West Texas intermediate – now the most actively traded after May’s contract expired Tuesday afternoon – rebounded to above $13 per barrel as Wednesday, after briefly falling below $10 on Tuesday.
4:02 p.m. ET: Dow jumps 1.9% percent, or 450 points, after crude oil prices rebound
Here were the main moves in markets as of 4:02 p.m. ET:
S&P 500 (^GSPC): +62.75 (+2.29%) to 2,799.31
Dow (^DJI): +456.94 (+1.99%) to 23,475.82
Nasdaq (^IXIC): +232.15 (+2.81%) to 8,495.38
Crude (CL=F): +$2.30 (+19.88%) to $13.87 a barrel
Gold (GC=F): +$48.20 (+2.86%) to $1,736.00 per ounce
10-year Treasury (^TNX): +4.8 bps to yield 0.6190%
2:45 p.m. ET: Domestic crude oil futures settle higher, reversing some losses
West Texas intermediate crude oil June futures settled higher by 19%, or $2.21, to $13.78 per barrel Wednesday, a day after dropping 40% amid a broader drawdown in energy prices.
Brent crude oil, the international standard, recovered from a two-decade low, with June futures settling higher by about 5% to $20.37 per barrel.
11:23 a.m. ET: The economy has ‘probably bottomed’: Analyst
The worst may be over for the U.S. economic stall stemming from the coronavirus crisis, according to at least one economist.
“The economy itself has probably bottomed,” Neil Dutta, head of economics at Pantheon Macroeconomics, wrote in a note Wednesday. “Let me be clear: that DOES NOT mean a return to robust activity, but it does mean that economic conditions are not getting any worse at the moment.”
“We’ve seen an uptick in weekly steel production, TSA travel numbers have stabilized, mortgage purchase applications have ticked up, and motor gasoline demand has ticked up, a sign vehicle miles driven are up,” he added.
Dutta noted that the economic stabilization process will still be choppy and take time as states undergo a phased reopening process.
9:31 a.m. ET: Stocks open higher, reversing some losses
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): -54.15 points (+1.98%) to 2,790.71
Dow (^DJI): -423.10 points (+1.84%) to 23,441.98
Nasdaq (^IXIC): -175.15 points (+2.12%) to 8,441.54
Crude oil (CL=F): +$2.36 (+20.4%) to $13.93 per barrel
Gold (GC=F): +$38.00 (+2.25%) to $1,725.80 per ounce
10-year Treasury (^TNX): +3.5 bps to yield 0.606%
7:48 a.m. ET: Kimberly-Clark 1Q profit, revenue rises over last year as consumers stock up on essentials
Kimberly-Clark (KMB), the parent company of brands including Huggies and Kleenex, posted first-quarter sales and earnings that grew over last year, with purchase volumes jumping as consumers stocked up on essential home goods.
Overall volumes increased 8% in the first quarter over last year, “driven by increased shipments to support consumer stock up related to the global outbreak of COVID-19,” the company said in a statement. Adjusted earnings per share of $2.13 rose by 47 cents over last year, and net sales of $5 billion were up nearly 8%.
By segment, consumer tissue sales surged 13%, versus a decline of 3% in the same quarter last year. Personal care sales rise 6%, also more than reversing a 1% decline from the prior year.
Due to uncertainty over the pandemic, Kimberly-Clark withdrew its previously issued 2020 guidance and declined to provide a new outlook.
7:18 a.m. ET: Stock futures climb
Here were the main moves in markets, as of 7:18 a.m. ET:
S&P 500 futures (ES=F): up 33.5 points, or +1.23% to 2,765.5
Dow futures (YM=F): up 254 points, or +1.11% to 23,183.00
Nasdaq futures (NQ=F): up 94 points, or +1.11% to 8,525.75
Crude oil (CL=F): -2 cents, or -0.17%, to $11.55 per barrel
Gold (GC=F): +$6.60 (+0.39%) to $1,684.80 per ounce
10-year Treasury (^TNX): -6.9 bps to yield 0.557%
7:12 a.m. ET: Delta Air Lines posts 1Q loss, revenue drop but looks to conserve cash
Delta Air Lines (DAL), one of the many carriers hit hard by travel restrictions arising amid the coronavirus pandemic, reported a first-quarter loss and adjusted revenue drop of nearly one-fifth compared to last year. But the company outlined a plan to slow its cash burn as global travel remains low.
"With the significant impact of COVID-19 on Delta's revenue, we were burning $100 million per day at the end of March. Through our decisive actions, we expect that cash burn to moderate to approximately $50 million per day by the end of the June quarter," CFO Paul Jacobson said in a statement. "The decade of work we put into the balance sheet to lower debt and build unencumbered assets has been critical to our success in raising capital and we expect to end the June quarter with approximately $10 billion in liquidity."
Delta’s posted a first-quarter adjusted pre-tax loss of $422 million, or 51 cents per share, compared to a profit of $831 million in the same quarter last year. First-quarter adjusted revenue of $8.59 billion was down 18% over last year.
7:00 a.m. ET Wednesday: Mortgage applications ticked down last week as new home-buyers stayed sidelined by COVID-19
An index measuring mortgage loan application volume fell 0.3% for the week ended April 17 over the previous week, the Mortgage Bankers Association said in a report Wednesday morning. This followed a 7.3% rise for the prior week.
Beneath the headline index, refinances fell 1% from the prior week, but was 225% higher from the same week a year ago, as low interest rates helped support applications. The subindex tracking new purchases rose 2% from the prior week, but dropped by 31% over the same week last year and was near the lowest level since 2015.
“Mortgage applications were essentially unchanged last week, as a slight drop in refinance activity was offset by a 2% increase in purchase applications. California and Washington, two states hit hard by COVID-19, saw another week of rising activity – partly driving the overall increase,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, sad in a statement.
“The pandemic-related economic stoppage has caused some buyers and sellers to delay their decisions until there are signs of a turnaround,” he added. “This has resulted in reduced buyer traffic, less inventory, and March existing-homes sales falling to their slowest annual pace in nearly a year.”
6:05 p.m. ET Tuesday: Stock futures open slightly higher
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:05 p.m. ET Tuesday evening:
S&P 500 futures (ES=F): up 9.5 points, or +0.35% to 2,741.50
Dow futures (YM=F): up 94 points, or +0.41% to 23,023.00
Nasdaq futures (NQ=F): up 36.75 points, or +0.44% to 8,468.5