U.S. stock futures were little changed in overnight trading and pointed to a largely flat open on Wednesday, following two positive sessions in the equity markets.
Dow futures dipped 13 points, indicating a Wednesday opening loss of about 21 points. S&P 500 and Nasdaq futures also pointed to a marginally lower Wednesday open for the two indexes.
The moves came as investors weighed the consequences of a growing number of states beginning to reopen their economies in the first two weeks of May.
President Donald Trump acknowledged on Tuesday that “there’ll be more death” from coronavirus but argued that not reopening businesses would also cost people their lives in other ways such as drug overdoses and suicides.
On Tuesday, the Dow Jones Industrial Average climbed 133 points, after being up 419 points at its high of the day. The S&P 500 rose 0.9% and the tech-heavy Nasdaq Composite gained 1.13%. Large cap technology companies — Microsoft, Apple and Facebook — added to their recent strength.
“The market is enjoying the economy opening, albeit on a phased-in schedule but that more and more states are opening,” Quincy Krosby, chief market strategist for Prudential Financial told CNBC. “The numbers in terms of new cases remain at a level that does not, at this point, suggest that the opening is causing cases to rise.”
The fast-spreading coronavirus — which has inflected at least 1.1 million Americans and killed more than 70,000, according to Johns Hopkins University — has seen a leveling off of news cases in the U.S.
California will permit clothing stores, bookstores and flower shops to reopen for curbside pickup as soon as Friday while New York plans to ease restrictions on manufacturers, construction and select retailers next week.
While U.S. equities closed in positive territory on Tuesday but well of their highs, after losing steam in the final hour of trading. Federal Reserve Vice Chairman Richard Clarida said more policy support will be need from the central bank and government to support the markets and the economy.
“The question will be if the market is moving too quickly, too fast as we see this resumption of interest in equities,” Krosby added. “But for now the market is resuming the move towards absorbing the weaker economic data but essentially trying to look beyond to see whether or not the economy can open at a more accelerated pace.”
Oil prices also rallied 20% on Tuesday, its fifth-straight day of gains, fueled by optimism around an uptick in demand as worldwide economies reopen.
The market’s gains on Tuesday came even after dismal data on the U.S. services sector. The ISM nonmanufacturing index dropped last month to its lowest level since March 2009.
Earnings season continued on Tuesday as companies revealed how the coronavirus impacted their corporate profits. Disney reported a 58% drop in sales from theme parks and cruises but is expected to boost engagement on its newly-launched streaming service, Disney+. Shares of the media giant ticked lower in extended trading.
Video game company Activision Blizzard jumped 5% after hours after it beat on earnings and raised it guidance.
Earnings season continues on Wednesday with General Motors, CVS Health and Wendy’s reporting before the bell. Ride hailing company Lyft, Peloton, PayPal, Hyatt Hotels, Etsy and Grubhub will post quarterly results.
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