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Wall Street snaps two-day slump on lift from tech titans

Stock Markets May 04, 2020 05:00PM ET
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© Reuters. The spread of the coronavirus disease (COVID-19) in New York

By Lewis Krauskopf

(Reuters) - U.S. stocks ended higher on Monday as increases in large tech and internet companies and oil price gains outweighed concerns about the latest U.S.-China tensions and downbeat sentiment from the annual meeting of Warren Buffett's Berkshire Hathaway.

Major U.S. indexes opened lower but moved higher throughout the afternoon to snap two-day losing streaks.

Stocks have rebounded sharply since late March from the coronavirus-fueled sell-off, helped by massive monetary and fiscal stimulus. Investors are now watching efforts by a number of states trying to spark their economies by easing restrictions put in place to fight the outbreak.

On Monday, New York Governor Andrew Cuomo outlined a phased reopening of business in the state hardest hit by the COVID-19 pandemic. California Governor Gavin Newsom said that retail businesses in the state may begin reopening as early as this week.

“Can you lift restrictions and begin to phase in economic activity and yet keep the number of cases at bay? That is what the market is focused on right now,” said Quincy Krosby, chief market strategist at Prudential Financial (NYSE:PRU) in Newark, New Jersey.

The Dow Jones Industrial Average (DJI) rose 26.07 points, or 0.11%, to 23,749.76, the S&P 500 (SPX) gained 12.03 points, or 0.42%, to 2,842.74 and the Nasdaq Composite (IXIC) added 105.77 points, or 1.23%, to 8,710.72.

Gains in Microsoft (O:MSFT), Apple (O:AAPL) and Amazon (O:AMZN) were the biggest lifts for the S&P 500, following mixed reaction last week to reports from big tech names.

Energy (SPNY) was the best performing S&P 500 sector, rising 3.7%, as oil prices gained.

Shares of Delta Air Lines Inc (N:DAL), American Airlines Group Inc (O:AAL), Southwest Airlines Co (N:LUV) and United Airlines Holdings Inc (O:UAL) fell between 5% and 8%, among the biggest decliners on the S&P 500 after Berkshire Hathaway dumped stakes in major U.S. airlines.

Shares of Berkshire (N:BRKa) itself fell 2.6% and weighed on the S&P 500 after the conglomerate posted a record quarterly net loss of nearly $50 billion.

Buffett, whose comments are closely followed by investors, acknowledged at Berkshire's annual meeting on Saturday that the pandemic could significantly damage the economy and his investments.

“His narrative was relatively sober compared to his posture over the years," said Emily Roland, co-chief investment strategist at John Hancock Investment Management.

A flare-up in U.S.-China tensions also pressured the market. Secretary of State Mike Pompeo said on Sunday there was "a significant amount of evidence" that the new coronavirus emerged from a Chinese laboratory. An editorial in China's Global Times said he was "bluffing".

Investors are also digesting a difficult corporate results season. With more than half of S&P 500 companies reporting so far, first-quarter earnings are expected to have fallen 12.5%, according to Refinitiv data.

Shares of Tyson Foods Inc (N:TSN) tumbled 7.8% after the company said the coronavirus crisis will continue to idle U.S. meat plants and slow production as it reported lower-than-expected earnings and revenue for the quarter.

Data on Monday showed new orders for U.S.-made goods suffered a record decline in March and could sink further as disruptions from the coronavirus fracture supply chains and depress exports.

Declining issues outnumbered advancing ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and three new lows; the Nasdaq Composite recorded 18 new highs and 14 new lows.

About 9.5 billion shares changed hands in U.S. exchanges, below the 12.1 billion-share daily average over the last 20 sessions.

Wall Street snaps two-day slump on lift from tech titans
 

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Comments (7)
Michael King
Michael King May 04, 2020 11:50AM ET
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I am missing Obama and more of missing Bush and  Clinton now. So disappointed with Trump. For three more years, he has done nothing but talking/tweet of trade war. With over 23 trillion national debt, there are too much more important things for Trump to do. Trump is just too incapable and has no sense in dealing international fairs.
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Teh Olympian
Teh Olympian May 04, 2020 11:50AM ET
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You must be "conservatively abled." We had a special room in school for people like you.
Michael King
Michael King May 04, 2020 11:50AM ET
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Rehoboam IO   At Obama/Bush/Clinton time, US sold a lot more products with 500% profit margin like apple, Boeing ... and use a fraction of that profit to buy hard labor and environment adverse products from China. But now Trump forced China to manufacture all those high profit products them self. I am just too disappointed to Trump as he is just a street fighting sisi, no wisdom and capability at all.
Bob Carlson
2CentsWorth May 04, 2020 11:50AM ET
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Michael it's becoming obvious you're loading the boards with propaganda.
Bob Carlson
2CentsWorth May 04, 2020 11:50AM ET
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Alert to U.S. Citizens. China propaganda meant to undermine the U.S. is here on these boards. Read messages, ask yourself why this message?
Michael King
Michael King May 04, 2020 11:50AM ET
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Bob Carlson   Freedom of speech is a given right to everyone of us in US especially I am simply speaking out the truth. Freedom and equality is the fundamental in US. Hopefully those two human rights are not 2 cents worth on where you came from.
Art Hughes
Art Hughes May 04, 2020 11:49AM ET
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Where are the flarred China tensions?Seems like negative slant into someones own vested intrrest. Market manipulation from this headline.
Teh Olympian
Teh Olympian May 04, 2020 11:49AM ET
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Try reading the article.
jaemin lee
jaemin lee May 04, 2020 11:49AM ET
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if you dont understand, stay away from market. its smart advise. trump mention almost everyday blame on china and administration will discuss how to revenge china this Thursday.
pdyuy veagx
pdyuy veagx May 04, 2020 11:42AM ET
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Goldman Sachs - Will Meade wrote About the same bearish pattern from the estate bubble in year 2000 looks much of the situation now and that the market can go 42% down from this point in the following month
Jean Racine
Jean Racine May 04, 2020 10:21AM ET
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Do you think those fat bulls and bears would tell us they were going to take their profit and run? No, they spread the news after the fact. We, small puppies don't find no crumbs left. But they will run back to their spoils; get in now good people, before they get the water dirty again.
Kilo Byte
Kilo Byte May 04, 2020 10:15AM ET
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The Drumpf effect.  Don't worry, the Fed will print us back up before Dear Leader makes another d u m b statement.
Christoph Willywonka
Christoph Willywonka May 04, 2020 8:09AM ET
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puts on spy today. sell them tomorrow. buy calls tomorrow and sell in a week
Kapishwar Singh
Kapishwar Singh May 04, 2020 8:09AM ET
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okk
Afolabi Ayo
Afolabi Ayo May 04, 2020 7:01AM ET
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how can I trade this s & p. can someone help me out with this
Olaniyan Olamide Aliyu
Olamide May 04, 2020 7:01AM ET
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Register with a US stock broker and you will be able to trade S&P
Eric Chen
Eric Chen May 04, 2020 7:01AM ET
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You can't trade S&P.  S&P is an index, not a stock.  The closest you can come is trading an indexed ETF.
 
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