US open: Positive start to trading as rate of infection slows
By Iain Gilbert
Date: Wednesday 08 Apr 2020
(Sharecast News) - US stocks opened higher on Wednesday as a volatile week for indices continue.
As of 1540 BST, The Dow Jones Industrial Average was up 0.95% at 22,868.05, while the S&P 500 was 0.97% firmer at 2,685.32 and the Nasdaq Composite started out the session 0.90% stronger at 7,958.58.
The Dow opened 214.19 points higher on Wednesday after closing out the previous session slightly weaker as the blue-chip index staged its biggest reversal since the 2008 financial crisis.
While US cases of Covid-19 have topped 383,000, with at least 12,000 deaths, according to Johns Hopkins University, the volume of daily increases in both the US and across the globe have fallen every day since Friday.
The National Institute of Allergy and Infectious Diseases' Anthony Fauci said the death count was now lower than initially expected. However, he warned that containment efforts should be intensified.
As a result, investors will be looking out for hints on when the US economy could return to normal, given that White House officials have previously expressed a desire to begin to reopen parts of the economy that had been shut down due to efforts to limit the spread of the contagion.
White House economic advisor Larry Kudlow said he believes the economy will be able to reopen in "the next four-to-eight weeks".
Oanda's Craig Erlam said: "The Dow may technically be in a bull market but this has all the feeling of a bear market rally. Of course, that's not to say there isn't value at these levels but as ever, it's a matter of timing.
"These markets are discounted and picking bottom's is a mug's game. But these are wild markets, even still, so a high pain threshold is required."
On the macro front, mortgage applications dropped 17.9% in the week ended 5 April, according to the Mortgage Bankers Association.
Mortgage applications to purchase a home fell even sharper in states hardest hit by the Covid-19 outbreak. Purchase applications fell 47.5% year-on-year in California, 55.4% in New York and 59.9% in Washington.
Still to come, minutes from the Federal Reserve's FOMC meeting on 15 March will be published at 1900 BST.
No major corporate earnings were slated for release on Wednesday.
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