Stock Market Desk: U.S. stocks traded sharply higher at the start of Wednesday, for the first time in three days after finishing at the lowest level in about two weeks on Tuesday, amid expectations for Congress to roll out a new stimulus package to ease the economic damage wrought by the COVID-19 pandemic.
The Dow Jones Industrial Average DJIA, +1.48% advanced 440 points, or 1.9%, to around 23,459. The S&P 500 SPX, +1.70% added 53 points, or 1.9%, to 2,790. The Nasdaq Composite COMP, +2.07% climbed 178 points, or 2.2%, to 8,442.
At Tuesday’s regular close, the Dow fell 631.56 points, or 2.7%, to end at 23,018, the S&P 500 index lost 86.60 points, or 3.1%, to close at 2,736.56, with both benchmarks finishing at their lowest levels since April 7, according to FactSet data. Meanwhile, the Nasdaq Composite Index retreated 297.50 points, or 3.5%, to end at 8,263.23, marking its lowest close since April 13. Investors may be taking some heart from U.S. corporate earnings reported late Tuesday and the passage in the Senate of another coronavirus relief package worth about $500 billion to replenish funds for small businesses that were exhausted within days of applications opening, and will likely pass the House of Representatives Thursday, as President Donald Trump threw his support behind the measure.
The deal provides $100 billion for health care, split between $75 billion for hospitals, including some set aside for rural ones, and $25 billion for coronavirus testing.
Treasury Secretary Steven Mnuchin said he was looking forward to having most of the U.S. economy open later in the summer. He also added the Trump administration was looking at ways to support U.S. oil producers.
An unprecedented collapse below zero in the price of spot oil futures earlier this week eroded the market’s bullish patina, but values for crude appeared set to stabilize Wednesday, after the history-setting May contract expired and as West Texas Intermediate oil for June delivery looked set to recover a portion of its losses after settling at the lowest level for a most-active contract since 1999.
Although oil companies represent a sliver, at about 2.6%, of the overall S&P 500 index, the slump in crude prices has undermined investor confidence as the market recovers from its fall in the wake of the coronavirus pandemic, with the oil-price drop seen leading to bankruptcies among energy-related companies.
Meanwhile, Netflix Inc. NFLX, -1.38% reported far better earnings than analysts’ consensus estimates and revealed record growth in subscribers amid stay-at-home protocols to slow the COVID-19 contagion. Netflix shares have been among the main drivers of the market’s gains from its bear-market low put in on March 23.
“Can shares continue their strength and buoy the overall market on Wednesday?” That’s the question BTIG analysts Julian Emanuel and Michael Chu posed heading into the day’s action.
Which stocks are in focus?
Shares of Netflix NFLX, -1.38% fall 0.7% as investors worry about the outlook for the streaming-media company after reporting record membership amid the pandemic. Delta Air Lines Inc. DAL, -0.56% shares rose 3.5% after it reported its first quarterly loss in five years as the coronavirus pandemic drove down passenger numbers.
Shares of AT&T T, -0.83% are up 3.2% Wednesday, though the company fell short of expectations with its first-quarter results as the COVID-19 outbreak negatively impacted its media business.were off 1.2% ahead of its quarterly results, due in the premarket.
