BY C NIVEDITA AND MEDHA SINGH
Wall Street’s main indexes were set to open sharply higher on Thursday after a surprise rise in Chinese exports and a surge in oil prices spurred hopes of an economic recovery, taking the sting off another gloomy weekly jobless claims report.
Exxon Mobil Corp and Chevron Corp rose more than 2% in premarket trading on optimism around future oil demand after China’s overseas shipments in April rose for the first time this year as factories raced to make up for lost sales.
Weapons maker Raytheon Technologies Corp jumped 4.7% to lead gains among Dow components, as Chief Financial Officer Toby O’Brien said he expected positive free cash flow in 2020, primarily driven by its defense business.
“With expectations just set so low, any positive news is really being welcomed, and the continuing negative news, to some extent, is being pushed to the side,” said Rick Meckler a partner at Cherry Lane Investments in New Vernon, New Jersey.
U.S. stock indexes have rebounded sharply from a coronavirus-fueled selloff in March, powered by monetary and fiscal stimulus and, more recently, hard-hit states reopening businesses following sweeping lockdowns.
However, with the S&P 500 now about 16% below its record high, analysts have warned of another selloff with data revealing the extent of the pandemic’s economic damage and U.S.-China tensions resurfacing over the origin of the novel coronavirus.
Latest data showed 3.1 million Americans applied for state unemployment benefits last week, but the number marked the fifth straight weekly decrease in applications and raised hopes the worst of the outbreak’s impact on the labor market was over.
The weekly claims report followed news on Wednesday that private payrolls fell by a record 20.2 million in April, which set up the overall labor market for historic job losses. The Labor Department’s more comprehensive nonfarm payroll report is due on Friday.
“The stock market currently is not a true representation of the economy’s weakened status,” said Hussein Sayed, chief market strategist at FXTM.
“Investors are betting on a best-case economic recovery scenario supported by further easing measures. But predicting how asset prices play out during this pandemic is more of a guessing game than any form of true analysis.”
At 8:52 a.m. ET, Dow e-minis were up 316 points, or 1.34%, S&P 500 e-minis were up 42.5 points, or 1.5% and Nasdaq 100 e-minis were up 134.5 points, or 1.5%.
About 350 of the S&P 500 companies have reported so far and first-quarter earnings are expected to have fallen 12.4%, with analysts expecting an earnings recession by the second quarter, according to Refinitiv data.
PayPal Holdings Inc jumped 9.7% after the payments processor said it expected a strong recovery in payments volumes in the second quarter as social distancing drives more people to shop online.
Lyft Inc surged 15.2% as the ride-hailing company posted higher-than-expected revenue and vowed to further cut costs to become profitable. Rival Uber Technologies gained 7.8%.