US open: Stocks surge as Wall Street attempts to rebound from sell-off
By Iain Gilbert
Date: Monday 06 Apr 2020
(Sharecast News) - US stocks opened sharply higher at the bell on Monday after an overall more optimistic tone around the Covid-19 pandemic from the White House at a press conference a day earlier.
As of 1545 BST, the Dow Jones Industrial Average was up 4.44% at 21,987.21, while the S&P 500 was 4.37% firmer at 2,597.30 and the Nasdaq Composite started out the session 4.48% stronger at 7,703.57.
The Dow Jones opened 934.68 points higher on Monday after closing out the previous session on the red as data revealed that non-farm payrolls collapsed in March, although another sharp rally in crude oil futures helped to stem losses.
Optimism about a marked slowdown in the increase of death rates and new infections in the hardest-hit countries like Italy and Spain saw indices open higher on Monday and had many investors hopeful that current restrictions could be shorter-lived than many had previously speculated.
New York state reported 594 new deaths related to Covid-19 on Sunday, fewer than the 630 reported on Saturday and marking the first daily decline.
But Donald Trump was still cautious, warning that there would be "a lot of death" in what looked set to be the US' "toughest week".
Also underlining sentiment was news that Russia and Saudi Arabia were very close to a deal on coordinated oil production cuts. However, oil prices were down after a meeting between OPEC and Russia scheduled for Monday was postponed until Thursday.
SpreadEx analyst Connor Campbell said: "The US indices indulged in the same hopes as their European peers on Monday, perhaps prematurely celebrating signs of coronavirus stabilisation from around the world.
"The Dow Jones started big, adding 1000 points as it re-crossed 22,000. It will be interesting if it can substantially push past that level in the next few sessions. For the last week or so it has been trading between 21,000 and 22,000, unable to find justification for a foray above the latter, yet not so shocked by America's growing unemployment crisis to fall through the former."
In corporate news, Boeing shares were sharply higher after the the firm extended the shutdown of its Seattle production operations indefinitely, while Delta shares slipped back after saying it expected to see revenues fall by 90% in the second quarter.
While no major economic data was scheduled for release on Monday, former Federal Reserve Chair Janet Yellen said the economy was in the throes of an "absolutely shocking" downturn that was not reflected yet in the current data.
If it was, she said, the unemployment rate probably would rise as high as 13%, while the overall economic contraction was about 30%.
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