Workers upload plywood that will be exported on a cargo ship at a port in Lianyungang in China's eastern Jiangsu province on Thursday.
AFP via Getty ImagesGlobal equities are climbing, boosted by a narrative that seems like it belongs in 2019: hopes for trade talks between Washington and Beijing next week. That outweighed data showing millions more Americans filed for unemployment claims last week.
The Dow Jones Industrial Average was up 271 points, or 1.1%, in morning trading, while the S&P 500 and the Nasdaq Composite had each risen 1.2%. The Russell 2000 jumped 1.6%.
Wednesday saw losses for the Dow and S&P, but not the Nasdaq, as investors continue buying technology stocks amid the pandemic. At 8968.11 in mid morning, the index was in the green for 2020, having recovered the majority of its bear-market losses. It remains about 7% below its mid-February record high.
A close above 8972.60 would mark the first time since March 4 that the index has ended the day with a year-to-date gain.
U.S. government data on Thursday morning showed that 3.2 million people filed claims for unemployment benefits last week. It’s a horrific number, but well below the figures of more than 6 million recorded in the first few weeks of lockdowns to fight the coronavirus. The data comes ahead of Friday’s nonfarm payrolls report, which will likely be one of the worst on record.
The potential for rising trade tensions between the U.S. and China has added another worry to an already loaded investor plate in recent days, as rhetoric became more heated between leaders of the world’s two largest economies. But on Thursday, a report by Bloomberg News that top trade negotiators Robert Lighthizer and Liu He are expected to speak on U.S.-China trade as early as next week appeared to allay the concerns.
President Donald Trump has hinted he will nix a phase-one trade deal agreed on late last year if he doesn’t see progress on China’s side. That country was a bright spot Thursday, as exports unexpectedly rose in April, gaining 3.5% from a 6.6% fall in March.
Russ Mould, investment director at AJ Bell, told clients in a note that markets liked what they saw because it means China “could quickly recover from the pandemic.”
China’s Shanghai Composite index closed down 0.2% on Thursday, while Hong Kong’s Hang Seng lost 0.6%. Japan’s Nikkei 225 index added 0.3% as it reopened Thursday following holiday closures.
European stocks also saw gains, with a 0.9% gain for the Stoxx Europe 600 index. The U.K.’s FTSE 100 Index rose 1.3% after the Bank of England left key interest rates and its bond-buying program unchanged. France’s CAC 40 added 1.2% and the German DAX climbed 1.1%.
Haven assets rose alongside stocks, suggesting investors sought to hedge some of their risk. The price of gold added 0.9%, to $1,704.10 an ounce. The yield on the 10-year U.S. Treasury note fell 2 basis points, or hundredths of a percentage point, to 0.693%, as the price of the securities rose. The U.S. Dollar Index (DXY)—which measures the greenback against a basket of other currencies—ticked up 0.3%.
Earnings and the price of oil—up 7.3% for West Texas Intermediate, to $25.74— remain the main factors moving individual stocks. Oil-services provider Baker Hughes (BKR) shares gained 4.2% on Thursday, while Occidental Petroleum (OXY) shares were up 3.7%.
Peloton Interactive (PTON) stock was up 11.2% after the connected exercise-equipment company said sales topped $500 million in its recent quarter. Demand soared for its at-home exercise bike and streaming fitness classes amid the pandemic.
Lyft (LYFT) stock gained 20.3%. The ride-hailing start-up reported a smaller loss than expected Wednesday evening. Coming into Thursday, Lyft stock was down almost 40% year to date.
ViacomCBS (VIAC) stock jumped 13.4% after the media company posted better-than-feared first quarter results. Advertising revenues fell off a cliff and will only get worse, management warned, but new licensing and carriage deals could help ease the blow. And the market was expecting grim results: ViacomCBS shares were down almost two-thirds year to date.
Another recently merged company, T-Mobile US (TMUS), had a strong first quarter in its last period before completing its acquisition of Sprint. The self-proclaimed ‘Uncarrier’ led the U.S. wireless industry in earnings growth and subscriber additions to start the year, it reported on Wednesday evening. Analysts gushed over the results, and T-Mobile stock jumped 6.7% on Thursday.
It isn’t all good news. Grubhub (GRUB) stock was down 10% after the company, like the others, beat Wall Street expectations for its first quarter results reported Wednesday evening. But investors wanted more. An environment in which people order food deliveries while stuck at home sheltering in place is made for Grubhub.
That is the situation for Carvana (CVNA) too. The online car dealership’s sales fell short of high expectations when Carvana disclosed the numbers after the market closed. The stock was down 4.3%.
Spirit Airlines (SAVE) shares dropped 14.5% after the budget airline reported a wider loss than expected Wednesday evening. There wasn’t a bombshell in the news release, but the company is dealing with low demand and taking government assistance. Shares were down about 70% year to date going into the report.
Write to Barbara Kollmeyer at bkollmeyer@marketwatch.com, Nicholas Jasinski at nicholas.jasinski@barrons.com and Al Root at allen.root@dowjones.com
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