Wall Street’s main indexes have risen on hopes of a pick-up in business activity as US states eased coronavirus-induced curbs, with investors also looking past a stunning 20 million plunge in US private payrolls last month.
Five of the 11 major S&P sectors were trading higher, with the technology index leading gains as traders bought into stocks perceived to be resilient at a time when billions of people globally are still locked indoors.
US stock indexes are now on course to gain for three straight sessions, building on a rally in April that was sparked by unprecedented stimulus and signs that the outbreak was peaking.
However, with macroeconomic data still foreshadowing a severe global recession, analysts have warned of another sell-off, particularly if reopening of economies sparks another wave of infections.
Data on Wednesday showed US private employers laid off a record 20.236 million workers in April, setting up the overall labour market for historic job losses last month.
The Labor Department’s more comprehensive report is due on Friday while a reading of initial jobless claims is set to be released on Thursday.
“We knew this was going to be bad so it matches the jobless claims. A lot of the bad news for April is pretty much factored in,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“But markets are looking at a potential recovery here, we’ve got a lot of states opening up. Businesses are starting to get going again, but the question is, is it too fast?”
In early trading, the Dow Jones Industrial Average was up 60.78 points, or 0.25 per cent, at 23,943.87, the S&P 500 was up 10.94 points, or 0.38 per cent, at 2,879.38 and the Nasdaq Composite was up 97.84 points, or 1.11 per cent, at 8,906.96.
The S&P financials index was among the biggest decliners as the Treasury Department said it would launch a long-planned 20-year bond to meet record government borrowing needs amid the outbreak.
In company news, General Motors Co jumped 6.3 per cent after the car maker topped first-quarter profit expectations and outlined plans for a May 18 restart of most of its North American plants.
CVS Health Corp gained 2.6 per cent after the company posted a better-than-expected first-quarter profit, as its pharmacy benefits management business and its drugstores benefited from customers stockpiling medicines due to COVID-19 lockdowns.
Activision Blizzard Inc rose 4.9 per cent after raising its revenue forecast on higher demand for video games such as its Call of Duty amid lockdowns.
Walt Disney Co added 3.7 per cent after the company said it would reopen Shanghai Disneyland to a reduced number of visitors next week, even as it estimated a $US1.4 billion ($A2.2 billion) hit to profit.
Advancing issues almost matched decliners on the NYSE and the Nasdaq.
The S&P index recorded four new 52-week highs and two new lows, while the Nasdaq recorded 34 new highs and 11 new lows.