U.S. stock futures were higher in early morning trading on Wednesday, following two positive sessions in the equity markets.
Dow futures were up about 0.9% and indicated opening gains of more than 200 points. S&P 500 and Nasdaq futures were also up about 0.9%.
Oil prices gained for a sixth-straight day, stabilization in a market that crashed to negative prices last month. Energy stocks like Apache and Marathon Oil were among the big premarket gainers.
Stocks which stand to benefit from a reopening of the economy were also higher in the premarket Wednesday. Gap shares rose 3.6%. Airlines and cruise lines were higher.
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.
Those three tech stocks were up in the premarket Wednesday again.
“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.
A report on private payrolls from ADP on Wednesday is expected to show 22 million jobs lost in April, according to economists polled by Dow Jones.
“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 rallied 20% on Tuesday, its fifth-straight day of gains, fueled by optimism around an uptick in demand as worldwide economies reopen.
Stocks shook off more poor earnings. 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 early trading.
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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