US stocks open higher on earnings and coronavirus stimulus
US stocks have opened sharply higher as investors put oil market chaos behind them to focus on corporate earnings and a new coronavirus stimulus package from Congress.
Wall Street’s Dow Jones stock index was up 1.6 per cent just after the bell. The S&P 500 was 1.6 per cent higher and the Nasdaq had climbed 1.8 per cent.
The rise in US stocks mirrored European markets. Britain’s FTSE 100 was 1.9 per cent higher while Germany’s Dax was up 1.3 per cent. The pan-European Stoxx 600 had climbed 1.6 per cent.
Wall Street’s bounce followed two consecutive days of falls, driven by unprecedented chaos in the oil markets that saw US crude oil prices fall into negative territory for the first time.
Although trading at roughly a fifth of their January level, oil prices have stabilised somewhat in the last few hours. WTI crude, the US benchmark, was up roughly 17 per cent at $13.60 per barrel. Brent crude was seven per cent higher at $20.70.
Oil majors Exxon Mobil and Chevron have staged a recovery after two bruising days. Both were up roughly four per cent in early trading.
Investor sentiment has also been lifted by another $480bn (£390bn) of stimulus from Congress that is expected to be cleared tomorrow.
Analysts at Bank of America said more money is likely in the pipeline. “We expect up to $1.5 trillion more in stimulus, which would bring the total stimulus passed this year to $4 trilloon or 20 per cent of GDP.”
Markets also found some solace in some better-than-expected corporate earnings. Semiconductor firm Texas Instruments shares rose after saying its strong inventory means it is well placed to tackle the downturn.
Despite Delta Airlines reporting its first loss in nine years, its shares rose after it said cheaper fuel and cost reductions will slash its expenses roughly in half.