Earnings Boost Wall Street Despite Job Woes

Wall Street's indexes climbed on Thursday, with the Nasdaq erasing losses for 2020, following a clutch of upbeat earnings reports led by PayPal as investors looked past more weak jobs data caused by the coronavirus-induced economic downturn.

Energy, financials and materials, which have lagged this year, led the way among S&P 500 sectors, while consumer staples lagged the most.

Shares of PayPal Holdings soared 14 per cent and boosted the S&P 500 and the Nasdaq after the company said it expects a strong recovery in payments volumes in the second quarter as social distancing drives more people to shop online.

Shares of media company ViacomCBS and ride-hailing firm Lyft also jumped after their earnings, as a first-quarter reporting season that Refinitiv estimates will show a 12 per cent decline in earnings begins to wind down. ViacomCBS shares rose 10.3 per cent and Lyft shares climbed 21.7 per cent.

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

“Everything is going smoothly so far and I think there’s an assumption on the market’s part that that’s a good sign," said Brad McMillan, chief investment officer for Commonwealth Financial Network. "The market is looking at this and saying so far, so good.”

The Dow Jones Industrial Average rose 0.89 per cent, to 23,876, the S&P 500 gained 1.15 per cent, to 2,881 and the Nasdaq Composite added 125 points, or 1.41 per cent, to 8,980.

The Nasdaq turned marginally positive for 2020 by closing above 8,973, after being down well over 20 per cent for the year as of late March. The S&P 500 remains down over 10 per cent this year.

Data showed millions more Americans sought unemployment benefits last week, suggesting layoffs broadened from consumer-facing industries to other segments of the economy and could remain elevated even as many parts of the country start to reopen

Investors were also encouraged by news that China's exports unexpectedly rose in April for the first time this year as factories raced to make up for lost sales due to the coronavirus pandemic. (Reuters)