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Stocks surge as investors snatch some hope from earnings and oil rallies on Iran tensions


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Stocks surge as investors snatch some hope from earnings and oil rallies on Iran tensions

U.S. stocks halted a two-day slide as investors digested the latest round of corporate earnings. Oil surged higher after the U.S. escalated tensions with Iran.The S&P 500 Index rebounded from the worst sell-off in three weeks amid earnings that sparked speculation a recovery will be sooner than expected. Kimberly-Clark rallied after reporting strong toilet-paper sales,…

U.S. stocks halted a two-day slide as investors digested the latest round of corporate earnings. Oil surged higher after the U.S. escalated tensions with Iran.

The S&P 500 Index rebounded from the worst sell-off in three weeks amid earnings that sparked speculation a recovery will be sooner than expected. Kimberly-Clark rallied after reporting strong toilet-paper sales, while Chipotle Mexican Grill rose on sales that topped estimates. Netflix slumped after proposing a debt offering, even though subscriber growth boomed. Texas Instruments advanced on solid results, but its forecast raised some concerns for chipmakers. AT&T joined the list of companies withdrawing their forecasts.

U.S. stock markets opened higher after a two-day selloff on Wednesday as upbeat quarterly earnings reports lifted sentiment following a record crash in oil prices, although companies warned of more pain in the coming months.

The Dow Jones Industrial Average rose 418.46 points, or 1.82 per cent, at the open to 23,437.34. The S&P 500 opened higher by 51.33 points, or 1.88 per cent, at 2,787.89. The Nasdaq Composite gained 171.32 points, or 2.07 per cent, to 8,434.55 at the opening bell.

The Toronto Stock Exchange’s S&P/TSX composite index was up 237.59 points, or 1.7 per cent, at 14,177.65.

The oil market continued to hold investor attention, with Brent crude slumping to a two-decade low before rebounding. American crude surged above US$13 a barrel after President Donald Trump ordered the navy to destroy any Iranian gun boats that harass American ships at sea. The main U.S. oil ETF announced a reverse share split to buoy its flagging price.

Investors are continuing efforts to assess the pandemic’s damage to the global economy, with the oil market chaos suggesting it will be deeper or longer than anticipated by those who drove the S&P 500 up 28 per cent from its March lows. Governments are devising ways to return people to work even as they discover infections are more extensive than they insisted only weeks ago.

The Stoxx Europe 600 Index increased broadly in the wake of Tuesday’s slump. Treasuries fell along with the dollar and European bonds. Euro-area policy makers plan to hold a call later Wednesday where they may discuss whether to accept junk-rated debt as collateral from lenders, officials familiar with the matter said.

The coronavirus killed two in California in early and mid-February, suggesting the pathogen was circulating in the U.S. weeks earlier than health officials thought. While Germany and a few other countries are moving to relax lockdown measures to contain outbreaks, Singapore — a global standard bearer for taming the deadly illness early on —has now become home to Southeast Asia’s largest recorded outbreak and is racing to regain control.

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Corporate earnings have been mixed. European consumer-goods companies from brewers to paint-makers sounded notes of caution on spending. Heineken NV canceled its interim dividend, while Kering said it doesn’t see a recovery in the U.S. or Europe before at least June or July after sales at its flagship brand Gucci tumbled.

“There’s no way you can predict earnings right now,” Michael Cuggino, portfolio manager at Pacific Heights Asset Management LLC, said on Bloomberg TV. “It’s virtually impossible until we have more visibility with respect to how to world comes out of the coronavirus on the other side.”

Roche Holding AG increased for a fifth day, after the drugmaker said it still sees a small profit gain this year as demand for its medicines holds up while it works on developing Covid-19 tests.

Elsewhere, the Australian dollar rose as better-than-expected retail sales data triggered the unwinding of some short positions. Stocks slipped in Japan but climbed in other major Asian markets. Gold rebounded to US$1,700 an ounce.

Bloomberg.com

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