Wall Street gets PayPal boost as Nasdaq erases 2020 declines
Reuters
Published May 07, 2020 06:59AM ET
Updated May 07, 2020 02:50PM ET
By Lewis Krauskopf
(Reuters) - Wall Street's indexes jumped on Thursday, with the Nasdaq turning positive for the year, following a clutch of upbeat earnings reports led by PayPal as investors looked past more weak jobs data caused by the coronavirus-induced economic downturn.
All 11 S&P 500 sectors moved higher, led by energy (SPNY), materials (SPLRCM) and financials (SPSY) which have lagged this year.
Shares of PayPal Holdings (O:PYPL) soared 13.9% and boosted the S&P 500 and the Nasdaq after the company said it expects a strong recovery in payments volumes in the second quarter as social distancing drives more people to shop online.
Shares of media company ViacomCBS Inc (O:VIAC) and ride-hailing firm Lyft (O:LYFT) also jumped after their earnings, as a first-quarter reporting season that Refinitiv estimates will show a 12% decline in earnings begins to wind down. ViacomCBS shares rose 10.7% and Lyft shares climbed 22.0%.
Stocks have rebounded sharply since late March from the coronavirus-fueled sell-off, helped by massive monetary and fiscal stimulus. Investors are now watching efforts by a number of states to spark their economies by easing restrictions put in place to fight the outbreak.
“You are seeing incrementally some parts of the global economy opening up again plus slightly better earnings," said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.
The Dow Jones Industrial Average (DJI) rose 294.12 points, or 1.24%, to 23,958.76, the S&P 500 (SPX) gained 40.43 points, or 1.42%, to 2,888.85 and the Nasdaq Composite (IXIC) added 132.69 points, or 1.5%, to 8,987.08.
The Nasdaq turned positive for 2020 during the session, after being down well over 20% for the year as of late March.
Data showed millions more Americans sought unemployment benefits last week, suggesting layoffs broadened from consumer-facing industries to other segments of the economy and could remain elevated even as many parts of the country start to reopen.
The U.S. employment report for April is due on Friday.
“The market rightly or wrongly is just much more focused on what that data looks like two months from now, not what that data looks like right now,” Freedman said.
Investors were also encouraged by news that China's exports unexpectedly rose in April for the first time this year as factories raced to make up for lost sales due to the coronavirus pandemic.
The development of treatments for the coronavirus has been watched closely by Wall Street as key for resuming economic activity. Moderna Inc (O:MRNA) shares rose 10.1% after the company sped up plans for its experimental COVID-19 vaccine and said it expected to start a late-stage trial in early summer.
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Advancing issues outnumbered declining ones on the NYSE by a 3.72-to-1 ratio; on Nasdaq, a 2.68-to-1 ratio favored advancers.
The S&P 500 posted nine new 52-week highs and no new lows; the Nasdaq Composite recorded 53 new highs and seven new lows.
Written By: Reuters
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