U.S. equities followed European stocks higher, with sentiment buoyed as more economies moved toward easing their coronavirus lockdowns. Oil headed for its longest winning streak in nine months.
The S&P 500 opened in the green as investors digested the latest earnings, including a beat from chemical maker DuPont Inc. Every sector climbed as the Stoxx Europe 600 advanced after slumping a day earlier and missing out on the late rebound for U.S. stocks. Energy shares led the rally amid the recovery in crude, with Total SA among the big winners even after reporting a 35 per cent plunge in first-quarter profit.
The Dow Jones Industrial Average rose 209.12 points, or 0.88 per cent, at the open to 23,958.88. The S&P 500 opened higher by 26.14 points, or 0.92 per cent, at 2,868.88. The Nasdaq Composite gained 98.94 points, or 1.14 per cent, to 8,809.66 at the opening bell.
The Toronto Stock Exchange’s S&P/TSX composite index was up 129.14 points, or 0.88%, at 14,874.18.
The present is dire but the future is looking brighter
Brad Bechtel, global head of foreign exchange at Jefferies LLC
“The present is dire but the future is looking brighter,” Brad Bechtel, global head of foreign exchange at Jefferies LLC, wrote in a note.
The euro fell as investors scrutinized a verdict from Germany’s top judges over the legality of European Central Bank stimulus. They ruled that some actions taken by the country’s Bundesbank to participate in the asset purchase program were unconstitutional. Italy’s bonds fell and German bunds rose, widening the yield spread between the two.
“There is reaction among euro area government bonds, but this ruling in Germany is not definitive for sentiment today on global markets,” said Stephen Gallo, head of European FX strategy at the Bank of Montreal. “Signs that lockdowns aren’t being severely re-tightened are setting the tone.”
Efforts by many major economies to start easing restrictions that have helped contain the coronavirus pandemic are inspiring a fragile confidence and hopes for an economic recovery. However stocks remain on shaky ground as U.S.-China tensions flare and traders weigh the chances of a second wave of infections.
As global deaths from the pandemic topped 251,000, Hong Kong said it will ease curbs on social gatherings and reopen shuttered schools. California, the first state to shut down its economy over COVID-19, said it will start loosening its lockdown on Friday. Italy began to reopen its economy after two months. Spain started to relax its lockdown regime after weeks of confinement.
In Asia, Australia’s dollar pared gains after its central bank left rates unchanged. Markets were closed in Japan, China and South Korea.