Stocks lift higher; oil prices crawl out of basement
NEW YORK » Stocks rallied on Wednesday, and the S&P 500 clawed back a chunk of this week’s sharp losses as a bit of oxygen pumped through markets around the world.
Even oil gained ground, pulling further away from zero after earlier getting turned upside down amid a collapse in demand. Stocks rose from Seoul to Spain, and winners outnumbered losers in New York by more than two to one. Treasury yields also pushed higher in a sign of a bit less pessimism among investors.
“This has been a tremendously good reminder that the stock market is a forward predictor,” said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management.
Investors are still bracing for a severe, painfully deep recession after businesses shut down worldwide in hopes of slowing the spread of the coronavirus. But they had already sent U.S. stocks down by roughly a third a month ago on that expectation. Now, even as depressing economic and health reports pile up, some investors are looking ahead to the prospect of parts of the economy reopening as infections level off in some areas.
“Right now, it’s about the economy beginning to open, even at the margins,” said Quincy Krosby, chief market strategist at Prudential Financial. “We’re watching Germany, the largest economy in Europe, begin to open. What this suggests is if things go well in these economies, we’re going to see more states begin to open, and perhaps open more broadly.”
The S&P 500 rose 62.75 points, or 2.3%, to 2,799.31 and trimmed its loss for the week to 2.6%. The Dow Jones Industrial Average climbed 456.94, or 2%, to 23,475.82, and the Nasdaq composite picked up 232.15, or 2.8%, to 8,495.38.
The yield on the 10-year Treasury rose to 0.61% from 0.57% late Tuesday. But it remains well below the 1.90% level where it started the year.
Energy stocks jumped to some of the market’s biggest gains, riding the ripple of strengthening oil prices. Halliburton, Apache and Diamondback Energy all added at least 9%. All three, though, are still down more than 60% for the year so far.
The price of a barrel of U.S. oil to be delivered in June jumped 19% to settle at $13.78. It had zig-zagged in the morning before turning higher after President Donald Trump threatened the destruction of any Iranian gunboats that harass U.S. Navy ships, raising the possibility of a disruption to oil supplies.
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. A collapse in demand for energy combined with continued production in countries around the world means too much oil is sloshing around, depressing its price. Brent crude, the international standard, climbed 5.4% to $20.37 per barrel.