Offshore oil drilling platforms are seen at sunset Tuesday, April 21, 2020, near Huntington Beach, Calif. Oil prices continue to drop, because very few people are flying or driving, and factories have shut amid widespread stay-at-home orders due to the coronavirus concerns. (AP Photo/Chris Carlson)
By Stan Choe and Damian J. Troise
Stocks around the world are clawing higher on Wednesday, and the S&P 500 climbed toward its first gain in what’s been a dismal week for markets.
Even oil gained ground. Prices for crude have been turned upside down because of how much extra oil is sloshing around following a collapse in demand. U.S. oil jumped 19% after President Donald Trump threatened the destruction of any Iranian gunboats that harass U.S. Navy ships, raising the possibility of a disruption to global oil supplies.
The S&P 500 was up 2.6% in the last hour of trading, following up on milder gains in Europe and Asia. It trimmed its loss for the week back below 2.5%, and Treasury yields also pushed higher in a sign of a bit less pessimism in the market.
The Dow Jones Industrial Average was up 529 points, or 2.3%, to 23,548, as of 3:05 p.m. Eastern time, and the Nasdaq was up 3.1%. Gains accelerated through the day and were widespread, with all 11 sectors that make up the S&P 500 up.
”This has been a tremendously good reminder that the stock market is a forward predictor,” said Andrew Slimmon, managing director and senior portfolio manager at Morgan Stanley Investment Management.
Investors sent U.S. stocks down by a third from February into late March, before efforts to slow the spread of the coronavirus threw the economy into a recession. Now, even as depressing economic and health reports pile up by the day, some investors are looking ahead to the possibility of parts of the economy reopening as infections level off in some areas.
The recession is still expected to be painfully deep, but potentially short, Slimmon said, which is pushing some investors to buy stocks that have been beaten down.
Energy stocks jumped to some of the market’s biggest gains, riding the ripple of strengthening oil prices. Halliburton, Diamondback Energy and Apache all added more than 8%. All three, though, remain down more than 60% for the year so far.
A barrel of U.S. oil to be delivered in June settled at $13.78. It had zig-zagged earlier in the morning, before Trump’s tweet. The big gain, though, means it’s recovered just a fraction of its steep losses. It was close to $30 at the start of last week and nearly $60 at the beginning of the year.
Brent crude, the international standard, climbed 5.4% to $20.37 per barrel.
Other companies that have been big losers due to the coroanvirus pandemic also rose after offering some slight hints of hope.
Chipotle Mexican Grill, for example, said that a key sales figure plunged 16% in March on widespread stay-at-home orders. But it hit a bottom during the week of March 29, down 35%, and has since improved a bit. Declines the past week were “in the high teens.” Its shares rose 12.3%.
Stocks of companies that have been winners in the new stuck-at-home economy, meanwhile, are also telling investors just how much they’ve been benefiting.
With people hunkered inside and craving for communication, Snap said that the number of active users on Snapchat each day jumped 20% in the first three months from a year ago. Its revenue topped Wall Street’s expectations, and Snap shares jumped 32.3%.
Netflix has also been a big winner as people look to fill their time, with shares recently hitting a record. It said late Tuesday that it added nearly 16 million global subscribers in the first three months of the year. But shares slipped 2.3% Wednesday after its profits didn’t quite live up to Wall Street’s lofty expectations.
Toilet paper has also been hugely in demand, and the maker of Cottonelle and Scott said its sales benefitted in the first three months of the year as customers stocked up on them and Kleenex tissue, among other items. Shares of Kimberly-Clark were up 1.6% after earlier flipping between gains and losses.
The company also retracted its financial forecasts for 2020 given how uncertain the global economy is due to the COVID-19 outbreak. It joined a lengthening line of companies pulling their guidance, and it also suspended its stock buyback program until at least the end of June.
The Senate late Tuesday approved a $483 billion proposal to deliver more loans to small businesses and aid to hospitals. The House is expected to vote on it Thursday.
The new bill would come on top of more than $2 trillion in aid that Congress has already approved. That, plus massive support for markets from the Federal Reserve, has helped the S&P 500 to rise more than 24% since a low in late March. The index has roughly halved its loss from its record set in February, which at one point was roughly 34%.
The yield on the 10-year Treasury rose to 0.62% from 0.57% late Tuesday. But it remains well below the 1.90% level where it started the year.
The global economy has come to a virtual standstill amid widespread stay-at-home orders, and economists expect a report on Thursday to show that another 4 million-plus workers filed for unemployment benefits last week. That would be on top of the roughly 22 million workers who had filed in the earlier four weeks, as layoffs sweep the nation.
In Europe, Germany’s DAX returned 1.6%, France‘s CAC 40 gained 1.2% and the FTSE 100 in London added 2.3%. In Asia, South Korea’s Kospi rose 0.9%, the Hang Seng in Hong Kong gained 0.4% and Japan’s Nikkei 225 fell 0.7%.
Stocks closed lower on Friday as investors continue to worry over rate hikes. John Lynch, CIO of Comerica Wealth Management, joins Cheddar News' Closing Bell, where he says value is back in play with investors. Lynch also believes the market has overreacted to the latest Fed minutes, suggesting a bounce-back at some point.
Private equity firms in 2021 spent $401.71 billion in U.S. tech investments — doubling 2020's level of $196.34 billion. As tech becomes increasingly interwoven into our lives amid the pandemic, investors grow bullish on the sector, especially software-as-a-service companies. How will 2022 stack up to 2021, and is there potential for parts of the tech sector to sink this year? John Jannarone, Editor in Chief at IPO-Edge, joins Cheddar News' Closing Bell to discuss 2021's record year of deals, how potential interest rate hikes will impact tech investments in 2022, the fastest-growing IPOs, and more.
Bed Bath & Beyond delivered disappointing fiscal third-quarter results for 2022. Shares initially dove more than 9% in premarket trading on the news but finished the day up nearly 8%. Bed Bath & Beyond has been a meme-stock target for online investors in the past -- so was meme-stock mania a factor in the recent stock movement for the company? Jaime Rogozinski, the founder of the subreddit WallStreetBets, joins Cheddar News' Closing Bell for more, as his forum helped spark the meme stock phenomena. He also discussed some decentralized finance services and trends for the retail investor to watch for in 2022.
College athletes scored big in 2021 when they were finally allowed to begin earning money based off of their name, image, and likeness, known as NIL. But how can young athletes best manage their money so they can set themselves up for years of success? Nicole Pullen Ross, Head of Goldman Sachs Sports and Entertainment Solutions, joins Cheddar News' Closing Bell to discuss why financial management for college athletes is important, common pitfalls they could run into, and more.
December's jobs report was weaker than expected: the economy only added 199,000 nonfarm payrolls compared to an estimate of 422,000. However, the unemployment rate hit a new pandemic-era low of 3.9%, beating expectations. One thing to consider is the fact that the impact of the COVID-19 omicron variant is not factored into these results as the read is taken around the middle of the month. So — how might the variant impact job reports over the next few months? Mark Zandi, Chief Economist at Moody's Analytics, joins Cheddar News' Closing Bell to discuss December's jobs numbers, his 2022 labor market outlook, how COVID-19 will continue to impact the labor market, and more.
Digital medical care provider Pear Therapeutics rang the closing bell on the Nasdaq Friday and President and CEO Dr. Corey McCann, joined Cheddar to talk about how the company plans to grow the business of software-based therapeutics and how the first FDA authorized prescription digital therapeutics company will go about treating illnesses like insomnia and addiction. "These really are pieces of software. In many cases, they're apps and in the cases of our addiction products, these are based on something called cognitive behavioral therapy or CBT," he said. "These products change the patient's brain circuitry to help them be abstinent, to help them stay in treatment, and that's exactly what we see in randomized clinical trials and that's what we see in the real world." He also addressed the ongoing mental health crises brought on by the pandemic. **copy updated to remove IPO information as Pear Therapeutics went public in December**
Gamestop shares were up on The Wall Street Journal report that the video game retail company plans to enter the NFT and crypto space. Adam Hollander, the founder of Hungry Wolves NFT, joined Cheddar to break down how it could be a lifeline for the struggling meme stock darling. "They're not resigning themselves to becoming the next Blockbuster story, and so while people may not be buying as many video games in a retail environment anymore, NFTs, in particular, people are starting to expect more gaming utility on the backend — at least for a variety of projects — and I personally think its a very smart move for them to do this," Hollander told Cheddar.
On Saturday, New York will join neighboring New Jersey and Connecticut in authorizing mobile sports betting. Matt Kalish, president and co-founder of Draftkings North America, joined Cheddar to talk about the landmark change that is estimated to rake in $500 million in annual tax revenue on a potential billion-dollar market. Kalish also addressed the possibility that legalized sports betting in the Empire State could cannibalize his company's revenues in the bordering states. "It's pretty inconvenient, you know, to go across the border to make a bet. And people were doing it, but I think it really stifled a lot of the opportunity," he said. "So while there's some of that going on, I think really a tremendous amount, like a giant percent, of New York will be very incremental."
James Tattersall, director of sales and marketing for Lake Nona Wave Hotel, talks about the hotel's initiatives to foster diversity and how these amenities champion inclusivity in the Orlando area.
Desmond Howard, former NFL wide receiver and Modelo college football playoff ambassador, joins Cheddar News to talk about the Modelo sweepstakes honoring the 30th anniversary of his iconic punt return.
