Stimulus hopes lift Wall Street after historic oil rout

(Reuters) – Wall Street’s main indexes rose on Wednesday on signs of more stimulus to aid small businesses ride out the coronavirus-induced economic slump and a recovery in oil prices.

U.S. crude and benchmark Brent prices edged higher after a collapse in the past two days, sending the S&P 500 energy index .SPNY up 2.8%, with Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N) among the top gainers on the blue-chip Dow Jones.

All the 11 major S&P 500 sector indexes were trading higher, as the U.S. Senate approved a relief package of $484 billion, adding to trillions of dollars in stimulus that have helped Wall Street rebound from its March lows.

The House of Representatives is expected to clear the bill on Thursday.

“Investors are looking at the economy very differently than they are looking at markets,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“The market is getting a lot of support from the Federal Reserve and the government. The economy is getting some, but the economy is going to move at a different pace.”

The benchmark S&P 500 is still 17% below its record high as state-wide shutdowns spark layoffs and crush consumer spending, putting several sectors at the risk of collapse.

Estimates for U.S. jobless claims for the latest week range as high as 5.5 million, while a reading on April U.S. factory activity is likely to fall to levels last seen during the 2008 financial crisis. Both reports are due Thursday.

Analysts have also drastically cut their S&P 500 earnings expectations for the first and second quarters and are now projecting a corporate recession for 2020, according to IBES data from Refinitiv.

A week after the big U.S. banks issued dismal 2020 forecasts, consumer discretionary and technology firms fared slightly better as the lockdown measures boosted demand for online streaming and home delivery of meals.

“Earnings may or may not be good because (the health crisis) just started taking root toward the end of the first quarter,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

“Investors are looking for what companies are going to say on their prospects for the future and are gauging the ability of management to navigate through this turbulent time.”

Fast-casual chain Chipotle Mexican Grill Inc (CMG.N) jumped 8.7% after it reported soaring digital and home delivery sales and said it had enough cash and liquidity to get through the next year.

Texas Instruments Inc (TXN.O) rose 3.5% as the chip industry bellwether reported better-than-expected first-quarter results and said a strong inventory allowed it to be prepared for disruptions caused by the pandemic.

Netflix Inc (NFLX.O) more than doubled its own projections for new customers in the first quarter. However, its shares fell 3.6% as it forecast a weaker second half if the lockdown measures were to be lifted.

Delta Air Lines Inc (DAL.N) reported its first quarterly loss in nine years, but shares gained 3.5% after the airline operator said cheap fuel and cost reduction measures will cut its expenses by about half in the current quarter.

At 10:16 a.m. ET, the Dow Jones Industrial Average .DJI was up 343.40 points, or 1.49%, at 23,362.28, the S&P 500 .SPX was up 41.58 points, or 1.52%, at 2,778.14 and the Nasdaq Composite .IXIC was up 149.96 points, or 1.81%, at 8,413.19.

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