(Reuters) – U.S. stock indexes were set to open higher on Wednesday on hopes of a pickup in business activity with states easing coronavirus-led curbs, while investors looked past a stunning 20 million plunge in U.S. private payrolls last month.
FILE PHOTO: The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, U.S., April 26, 2020. REUTERS/Jeenah Moon
After slumping to 2016-lows in March, the benchmark S&P 500 rebounded strongly in April on unprecedented stimulus and signs the outbreak was peaking.
But with macroeconomic data still foreshadowing a severe global recession, analysts have warned of another selloff, particularly if reopening economies sparks another wave of infections.
Data on Wednesday showed U.S. private employers laid off a record 20.236 million workers in April, setting up the overall labor market for historic job losses last month. The Labor Department’s more comprehensive report is due Friday.
“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 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?”
At 8:38 a.m. ET, Dow e-minis 1YMcv1 were up 102 points, or 0.43%, S&P 500 e-minis EScv1 were up 12.25 points, or 0.43% and Nasdaq 100 e-minis NQcv1 were up 48 points, or 0.54%.
General Motors Co (GM.N) jumped 6.5% in premarket trading after the automaker topped first-quarter profit expectations and outlined plans for a May 18 restart of most of its North American plants.
CVS Health Corp (CVS.N) gained 4% after the company posted 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 (ATVI.O) rose 6.8% after raising its revenue forecast on higher demand for video games such as its “Call of Duty” amid lockdowns.
Walt Disney Co (DIS.N) also inched higher even as it estimated that global measures to contain the coronavirus had cut its profits by $1.4 billion, mostly from its shuttered theme parks.
Mattel Inc (MAT.O) plunged 7.7% after the toymaker predicted a steep drop in second-quarter sales.
Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru; Editing by Anil D’Silva and Saumyadeb Chakrabarty