Stocks - Wall Street Opens Higher, Shrugging off Lockdown Extension

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened the week mostly higher, albeit paring early gains and trading generally in more nuanced fashion than has been usual in recent sessions, amid bargain-hunting and hopes for rapid progress in finding effective treatments to contain the Covid-19 outbreak.

By 10:15 AM (1415 GMT), the Dow Jones Industrial Average was up 191 points, or 0.9% at 21,828 points. The S&P 500 was up 1.5% and theNASDAQ Composite was up 1.9%.

The market took in its stride a sharp change in rhetoric on Sunday evening from President Donald Trump, who acknowledged the risk of up to 200,000 U.S. deaths from the virus, even under the measures taken so far to combat it.

Trump pushed back until the end of April the timeline for lifting the administration’s current guidance on social distancing, having earlier wanted the economy to be functioning as close as possible to normal by Easter (April 12).

With the prospect of extended lockdowns in Europe and the further spread of the virus across much of the emerging world, analysts are still revising down their expectations for the world economy this year. Analysts at consultancy IHS Markit said on Monday they now expect the U.S. economy to shrink by 5.4% this year due to the pandemic, with drops of 4.5% in the euro zone and U.K. and growth of only 2% in China. Chief economist Nariman Behravesh said in e-mailed comments that while recent responses in economic policy "are probably not big enough" to stop the economy shrinking, they will "act as circuit-breakers and prevent the COVID-19 recession from becoming far worse."

Johnson & Johnson (NYSE:JNJ) stock was up 5.4% after the company said it plans to start testing its experimental coronavirus vaccine on humans by September, with an eye to having it approved for use early next year. the drugmaker said on Monday.

J&J also said it will invest than $1 billion together with U.S. agency Biomedical Advanced Research and Development Authority (BARDA) to co-fund vaccine research.

Abbott Labs (NYSE:ABT) stock was up 8.2% after the company said the Food and Drug Administration has issued Emergency Use Authorization for a Covid-19 test that it says can deliver positive results in as little as five minutes and negative ones in less than a quarter of an hour.

Zoom Video (NASDAQ:ZM) stock was up another 5.4% after a 7.5% rise on Friday as investors continued to pour into the ultimate ‘working-from-home’ beneficiary.

The maker of videoconferencing software is now valued at $42 billion, or over 56 times last year’s sales, spurring talk of an unsustainable bubble.

Slack Technologies (NYSE:WORK) stock was up 1.5% at its highest since August, another play on the boom in remote working, albeit at a less stretched multiple of 25 times trailing 12-month sales.

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Oil and gas stocks continued to struggle as crude prices slipped to 17-year lows on the prospect of demand being suppressed for longer than hoped. 

Occidental Petroleum  (NYSE:OXY) stock was down 11.3% while Exxon Mobil Corp (NYSE:XOM) stock was down 1.6% and Chevron Corp (NYSE:CVX) stock was down 1.3%

Among independent shale producers, Pioneer Natural Resources  (NYSE:PXD) was down 8.1% while Continental Resources (NYSE:CLR) was down 14.8%.