Stocks Edge Down as Investors Look to Earnings, Economic Data
May 06 2020 - 10:49AM
Dow Jones News
By Avantika Chilkoti and Frances Yoon
U.S. stocks gave back early gains 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.
The S&P 500 fell 0.1% after the opening bell, on track for
its third day of gains. The Dow Jones Industrial Average lost about
35 points, or 0.1%, and the Nasdaq Composite increased 0.4%.
U.S. stocks have been rising this week as investors continue to
feel optimistic about the reopening of local economies.
Still, however, they are keeping a careful eye on first-quarter
earnings -- and any commentary on the outlook for the rest of this
year.
Shares of General Motors jumped 9% after the auto maker posted a
profit on strong truck sales.
CVS Health climbed 3.2% after it posted its latest results and
kept its earnings-per-share guidance for the full year unchanged.
And Occidental Petroleum jumped 3.4% after its latest result
Thursday. The energy producer is exploring ways to reduce its
roughly $40 billion debt load, The Wall Street Journal
reported.
Walt Disney, however, slipped 1.8% after 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.
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. Still, the nonfarm private sector in the U.S. lost about
20.2 million jobs from March to mid-April.
The U.S. Department of Labor is expected to release its April
employment report on Friday.
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 0.709%, from
0.656% on Tuesday, signaling a muted rise in investors' risk
appetite.
In commodities, Brent crude, the global benchmark, dropped 2.1%
to $30.31 a barrel, following weeks of wild swings in energy
markets.
In Europe, the Stoxx Europe 600 benchmark was up 0.1% China's
Shanghai Composite Index closed up 0.6% after a five-day holiday
and Hong Kong's Hang Seng Index rallied 1.1%.
-- Caitlin McCabe contributed to this report.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and
Frances Yoon at frances.yoon@wsj.com
(END) Dow Jones Newswires
May 06, 2020 10:34 ET (14:34 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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