Stocks edged higher on Wall Street in early trading Thursday as investors weigh a mixed batch of economic reports highlighting the damage that the coronavirus lockdowns have inflicted on the economy.
The S&P 500 was up 0.2%, recovering from an initial slide of 0.9%. Gains in the financial, energy and technology sectors helped lift the market, outweighing losses in companies that rely on consumer spending, utilities stocks and elsewhere. Bond yields fell, another sign of caution in the market.
The Commerce Department said that the U.S. economy shrank at a 5% rate in the first three months of the year. A far worse decline is expected for the current quarter due to the pandemic. The Labor Department said another 1.5 million laid-off workers applied for unemployment benefits last week. That marks the 12th straight drop, a sign that layoffs are slowing, but remain at a painfully high level.
On a more encouraging note, the government said orders to American factories for big-ticket goods rebounded last month from a steep pullback in April and March as the economy began to slowly reopen.
The Dow Jones Industrial Average was up 93 points, or 0.4%, to 25,538. The Nasdaq, which hit an all-time high earlier this week, gained 0.1%. Small company stocks were faring worse than the rest of the market. The Russell 2000 index was off 0.1%.
Until this week, markets had been mostly rallying on hopes that U.S. states and regions around the world could continue to lift the spring lockdowns put in place to slow the spread of the coronavirus. Economic data have been positive, helping fuel the cautious optimism. But a rise in new infections is stoking worries that the reopening of businesses may have to be curtailed again, delaying the economy’s recovery.
Coronavirus hospitalizations and caseloads have hit new highs in over a half-dozen U.S. states, including California, Florida and Texas. New cases nationwide are back near their peak level of two months ago.
Despite shedding its gains for June, the S&P 500 still is on pace for its best quarter since the fourth quarter of 1998.
Bond yields fell. The yield on the 10-year Treasury note slipped to 0.66% from 0.68% late Wednesday. The yield tends to move with investors’ expectations for the economy and inflation.
In energy trading, benchmark U.S. crude oil rose 1.2% to $38.51 a barrel. Brent crude, the international standard, was up 1% to $41.02 a barrel.
After broad losses in Asia overnight, markets were mixed in Europe. Germany’s DAX rose 0.2%, while the CAC 40 in Paris picked up 0.5%. London’s FTSE was off 0.1%.
