Stocks jumped in early trading Thursday as investors bet on the U.S. economy reopening soon and as oil prices rebounded.
The tech-heavy Nasdaq also turned positive for 2020, making it the first of the three major averages to claw back its steep losses for the year. That rebound was largely driven by sharp gains in big tech stocks such as Facebook, Amazon, Apple, Netflix and Alphabet. Those stocks are all up at least 15% this quarter and are positive for 2020. Microsoft, another major tech stock, has rallied more than 16% this year and for the quarter.
“While we have all become even more dependent on the products and services provided by the FAANGMs during the Great Virus Crisis, they might have become more immune to government regulation,” wrote Ed Yardeni, president and chief investment strategist at Yardeni Research. “They have great balance sheets and generate lots of cash flow.”
Energy stocks were among the biggest gainers as oil prices jumped nearly 10% on Thursday, bringing their gain for the week to more than 30%. If that weekly gain holds, it will be the biggest-ever for West Texas Intermediate futures.
The Energy Select Sector SPDR Fund (XLE) jumped nearly 4%.
Stocks that would benefit from the reopening of the economy also gained in early trading, including Hilton Worldwide and MGM Resorts. Hilton traded 1.8% higher while MGM gained 1.7%. Carnival traded more than 4% higher while Norwegian Cruise Line gained 5.1%.
Thursday’s gains came even as another 3.17 million Americans filed for unemployment benefits last week, bringing the seven-week total to 33.5 million. But while jobless claims continue to rise, last week’s tally was the lowest since shortly after the coronavirus was declared a pandemic.
“As awful these figures are, it is the least amount of claims since mid March as we’ve likely cycled through the worst of the forced shutdown. We can now start analyzing the pace of reopenings, the level of business and what that new reality will look like,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
States such as California and New York have unveiled plans to gradually reopen the economy. Other states, including Georgia, have already let some nonessential businesses resume operations.
Meanwhile, China posted better-than-expected exports for April. Data from the General Administration of Customs released on Thursday showed exports…
Continue reading at CNBC.com