Stocks continued their winning week with more gains as investors shrugged off the latest figures illustrating the economic damage being wrought by the coronavirus and welcomed another effort by the Federal Reserve to limit the pain.
Oil prices initially shot higher after it appeared that OPEC and non-OPEC producers may be about to cut supply, but quickly changed course and turned lower as it became clear that further talks would be required.
The Dow Jones Industrial Average rose 335 points, or 1.4%, while the S&P 500 and the Nasdaq Composite were 1.5% and 0.6% higher, respectively.
The indexes had been lower in premarket futures trading, but rallied despite news that 6.6 million people filed initial claims for unemployment benefits in the latest week—bringing the total over the past three weeks to almost 17 million. Investors appeared to welcome plans by the Fed to deploy $2.3 trillion in lending to support markets for riskier corporate debt, ease funding strains for states and cities, and provide deferrable loans to small and medium businesses.
The moves go beyond anything the central bank did during the financial crisis just over a decade ago.
Oil prices gave up nearly 10% gains on Thursday afternoon, with West Texas Intermediate—the U.S. benchmark oil price—trading down 6.5%, to $23.46. Saudi Arabia and Russia have signalled openness to reducing supply in recent days, and have reportedly settled on a cut of several million barrels a day—a large portion of global demand during normal times. But other players in the international oil cartel didn’t appear to be on board with the cuts just yet.
And these aren’t normal times. Coronavirus-related downturns in travel and economic activity have caused global demand for oil to plummet. Even after a 30% rally since the start of April, the price of oil is down more than 60% since the start of 2020.
The market’s relative strength on Thursday builds on an upbeat day of trading Wednesday, when the Dow rose 3.4%, bringing its gain for the week to 11.3%. It was buoyed by a range of factors including favorable data on the spread of the coronavirus and the exit of Sen. Bernie Sanders from the presidential race.
The S&P 500 also rose 3.5% Wednesday and is up 10.5% for the week. The same numbers for the Nasdaq Composite are 2.6% and 9.7%, respectively.
Overseas, Japan’s Nikkei 225 closed slightly lower, down 0.04% while Hong Kong’s Hang Seng Index gained 1.4%. The STOXX Europe 600 index rose 1.6%, as Germany’s DAX gained 2.2%, France’s CAC 40 climbed 1.4%, and the U.K.’s FTSE 100 Index rose 2.9%.
Haven assets were mixed. The yield on the 10-year U.S. Treasury note fell 4 basis points, or hundredths of a percentage point, to 0.729%. Gold jumped 3.3%, to $1,739.90 an ounce, and the U.S. Dollar Index (DXY)—which measures the greenback against a basket of other currencies—fell 0.7%.
Shares of energy producers, which earlier had been sharply higher, pared their gains alongside falling oil prices.
Apache (ticker: APA) shares were up 5%, partly because the company announced an oil discovery earlier this week. Occidental Petroleum (OXY) stock rose 1.5%. Stock in the oil-services provider Halliburton (HAL) turned lower, trading down 5%.
Airline shares continued their recent rebound. United Airlines Holdings (UAL) shares surged 14%, American Airlines Group (AAL) stock was up 13%, and Alaska Air (ALK) shares have risen 8%.
Airlines have been badly beaten up by the Covid-19 outbreak. Shares of large U.S. air carriers were down about 56% year to date on average.
Pfizer (PFE) stock was up 2.5% after the Wall Street Journal reported the company identified a candidae for a coronavirus drug.
Xerox (XRX) stock gained 2.5% despite Citigroup double-downgrading the shares from Buy all the way to Sell. Typically, Wall Street analysts move ratings one notch at a time, moving from Buy to Hold to Sell.
Write to Al Root at allen.root@dowjones.com and Steve Goldstein at steven.goldstein@wsj.com
https://www.barrons.com/articles/stocks-moving-premarket-xerox-pfizer-exxon-mobil-halliburton-51586433412
2020-04-09 18:28:00Z
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