Wall Street gains on hopes of coronavirus slowdown

Reuters | Apr 7, 2020 at 4:25 PM

* S&P 500 set for best two-day gain in nearly two weeks

* Exxon, Halliburton track oil prices higher

* Cruise operators lead gains among S&P 500 firms

* Gains led by energy sector

* Indexes rise: Dow 2.68%, S&P 2.29%, Nasdaq 1.51%

April 7 (Reuters) - Wall Street rose on Tuesday on early signs of the coronavirus outbreak plateauing in some of the biggest U.S. hot spots, with the New York state's governor saying social distancing measures to curtail the spread of the virus were working.

The S&P 500 was set for its biggest two-day gain in nearly two weeks, building on a 7% jump on Monday, as health officials also revised down dire projections of the U.S. death toll.

Gains were led by the energy, financials and materials sectors, with an aggressive round of U.S. fiscal and monetary stimulus in the past month also boosting risk appetite.

"The rally is sentimental and a little premature because if we lift these lockdown measures too soon and try to resume economic activity, we're going to get a very severe pandemic rebound," said Indranil Ghosh, chief executive officer of Tiger Hill Capital in London.

The S&P 500 is up about 22% from March intraday lows, but remains 19% below its mid-February record high as the strict stay-at-home orders crushed demand across industries including airlines, automakers and hotels.

At 11:36 a.m. ET the Dow Jones Industrial Average was up 608.22 points, or 2.68%, at 23,288.21, the S&P 500 was up 61.00 points, or 2.29%, at 2,724.68 and the Nasdaq Composite was up 119.70 points, or 1.51%, at 8,032.94.

Wall Street's fear gauge has steadily retreated from 12-year peaks, but volatility is expected to remain high as companies prepare to report an expected slide in first-quarter earnings and outline more drastic plans to bolster cash reserves.

Analysts now expect first-quarter earnings for S&P 500 firms to fall 6.4% compared to a Jan. 1 forecast for a rise of 6.3%.

"There's still a lot of headwinds that could cause this market to re-test the lows," said Nancy Perez, senior portfolio manager at Boston Private Wealth in Miami.

"There will be the initial resumption of business on paper, but then the actual actions will have to follow."

Exxon Mobil throttled back a multi-year investment spree in shale, LNG and deep water oil production, saying it would cut planned capital spending this year by 30% as the pandemic saps energy demand.

Oilfield services firm Halliburton Co said it would cut about 350 jobs in Oklahoma and that its executives would reduce their salaries.

Exxon and Halliburton shares jumped 5% and 7.4%, respectively, also tracking a surge in oil prices amid hopes the world's main oil producers would agree to a cut in output at a meeting on Thursday.

Norwegian Cruise Line, Royal Caribbean and Carnival Corp, among the most heavily battered stocks this year due to a near halt in global tourism, rose between 16% to 24%.

Advancing issues outnumbered decliners more than 6-to-1 on the NYSE and 2-to-1 on the Nasdaq.

More sources
  • Wall Street gains on hopes of coronavirus slowdown (Reuters: Apr 7, 2020 at 4:21 PM)