Stocks – Wall Street Holds Early Gains, Lifted by Oil Bounce, Senate Action

By Geoffrey Smith

Investing.com — U.S. stock markets opened higher after two days of losses as a measure of confidence returned thanks to a rebound in crude oil prices and the Senate’s passing of another economic support package, which tops up the existing program for small businesses by more than $400 billion while also channelling more money to hospitals.

By 10:10 AM ET (1410 GMT), the Dow Jones Industrial Average was up 405 points, or 1.8%, at 23,424 points. The S&P 500 was up 1.7% and the Nasdaq Composite was up 2%.

U.S. crude futures bounced smartly after President Donald Trump tweeted threatening military action against Iran if it “harassed” U.S. shipping, and after Russia’s oil minister Alexander Novak said he thought the collapse in global oil demand had run its course.

The market was also supported by big leaps for social media companies. Facebook (NASDAQ:FB) stock rose 5.3% after announcing a stake of just under 10% in telecom group Reliance Jio, marking its first big investment in India. Rival Snap (NYSE:SNAP) also surged over 24% in response to its first-quarter earnings late on Tuesday, which showed advertising holding up well despite the coronavirus pandemic, and a bigger-than-expected rise both in average daily users and in the time they spend using the Discover feature.

Also up were consumer giant Kimberly-Clark (NYSE:KMB), which reported a sharp rise in sales of toilet paper due to stockpiling, and medical group Thermo Fisher Scientific (NYSE:TMO).

However, Netflix (NASDAQ:NFLX) stock slipped 2.6% on profit-taking after it reported late Tuesday that its first-quarter earnings missed the high expectations of Wall Street. The streaming giant attracted twice as many new subscribers, net, as analysts had expected, with nearly all the growth coming outside the U.S. (Asia and Europe were ahead of the U.S. in locking audiences down at home). CEO Reed Hastings warned that the trend was unlikely to persist, and had rather brought forward some of the growth that the company had expected to see later in the year.

The news also pulled down Roku (NASDAQ:ROKU) stock, the biggest beneficiary last year of the streaming boom, by 0.9%.

AT&T (NYSE:T) stock also edged 0.1% lower after the company’s first-quarter earnings and revenue missed expectations. The company lost nearly 900,000 subscribers to DirecTV and U-Verse in the quarter as consumers redirected their entertainment dollars to streaming services. AT&T won’t launch its new HBO Max service for another month yet.

Delta Air Lines (NYSE:DAL) stock was left unmoved by its first-quarter loss, which was accompanied by CEO Ed Bastian saying that he has cut the group’s cash burn to $50 million a day. After taking government aid and various other measures, Bastian said he still expects to have $10 billion in liquidity at the end of the second quarter.