Stocks rise as Wall Street heads for 3rd straight gain


Stocks are drifting higher in morning trading on Wall Street, putting the market on track for its third gain in a row.

The S&P 500 was up 0.5 per cent on Wednesday, coming off the heels of a whiplash start to the year where its worst quarterly performance since 2008 gave way to its best quarter since 1998. Treasury yields and the price of oil also ticked higher following encouraging reports on the U.S. economy.

But stocks in Europe and Asia were mixed after a series of reports underscored how fragile the recovery is. Canadian markets are closed because of Canada Day.

In New York, the Dow Jones Industrial Average was up 72 points, or 0.3 per cent, at 25,885, as of 10:37 a.m. ET, and the Nasdaq composite was up 0.6 per cent.

FedEx jumped 14.8 per cent for the biggest gain in the S&P 500 after it reported better results for the latest quarter than Wall Street expected. A boom in online shopping helped drive revenue for FedEx’s ground-delivery business.

A traveller wears a mask and protective goggles as he walks through Terminal 3 at O’Hare International Airport on June 16, 2020, in Chicago. United Airlines said that some fliers are starting to return to the skies for leisure trips, lifting its stock 5.8 per cent on Wednesday. (Nam Y. Huh/The Associated Press)

United Airlines leaped 5.8 per cent after it said it’s adding nearly 25,000 flights to its August schedule, compared with July. The airline said that some fliers are starting to return to the skies for leisure trips, though its August schedule will still be about 60 per cent below year-ago levels.

Other travel-related stocks were also strong, with Royal Caribbean Cruises up 5.9 per cent and Marriott International up 4.2 per cent.

Pfizer rose 4.2 per cent after it and German biotech company BioNTech announced encouraging preliminary data on their COVID-19 vaccine candidate.

Markets around the world roared back last quarter on hopes that economies are beginning to pull out of the severe, sudden recession that struck after governments shut down businesses in hopes of slowing the spread of the coronavirus. But a recent resurgence of COVID-19 cases, particularly in the U.S. South and West, has raised doubts about whether those hopes were premature or overdone.

In the United States, a report said that the manufacturing sector returned to growth last month, a much better reading than the slight contraction that economists were expecting.

Data pointing in right direction

Earlier, a separate report that suggested private employers hired more workers than they cut in June. Payroll processor ADP also revised its previously reported numbers for May, saying that private employers actually added nearly 3.1 million jobs that month instead of cutting 2.8 million.

But the June growth in ADP’s payroll report wasn’t as strong as economists expected. The U.S. government’s more comprehensive monthly jobs report will arrive Thursday.

In the world’s third-largest economy, a quarterly Bank of Japan survey showed manufacturers’ sentiment plunged to its lowest level in more than a decade, as the pandemic crushes exports and tourism.

FILE – In this May 15, 2019, file photo, a factory worker checks parts at a manufacturing plant for automobile air conditioners in Yantai in eastern China’s Shandong province. Two gauges of Chinese factory activity improved in September ahead of talks with Washington aimed at ending a tariff war, according to survey released Monday, Sept. 30, 2019. (Chinatopix via AP, File) (Associated Press)

But in the world’s second-largest economy, a separate survey showed China’s manufacturing activity improved in June, adding to signs of a gradual recovery. A similar survey for the 19-country eurozone showed an improvement in manufacturing in June, with the industry almost growing again after widespread shutdowns.

Analysts said that while the data pointed in the right direction, it shows that an economic recovery from the pandemic will be slow.

In Asia, Japan’s Nikkei 225 slipped 0.7 per cent, South Korea’s Kospi dipped 0.1 per cent, and stocks in Shanghai rose 1.4 per cent. In Europe, France’s CAC 40 was up 0.3 per cent and Germany’s DAX was virtually flat. The FTSE 100 in London was up 0.3 per cent.

The yield on the 10-year Treasury rose to 0.69 per cent from 0.65 per cent late Tuesday. It tends to move with investors’ expectations for the economy and inflation.

A barrel of U.S. crude oil rose 0.4 per cent to $39.44 US. Brent crude, the international standard, rose 1.2 per cent to $41.78.

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