US open: Early gains as multiples states look to reopen economies

Wall Street stocks traded higher at the open on Monday as market participants reacted to news that several US states were already eyeing a phased reopening of economic activity

As of 1545 BST, the Dow Jones Industrial Average was up 0.95% at 24,001.64, while the S&P 500 was 1.03% firmer at 2,865.95 and the Nasdaq Composite started out the session 1.08% stronger at 8,727.65.

The Dow opened 226.37 points higher on Monday, continuing Friday's rally driven by Donald Trump signing off on another $484bn economic rescue package.

New York Governor Andrew Cuomo said on Sunday that he planned to reopen the state's economy in various phases, with the first involving the construction and manufacturing sector heading back to work.

As part of Cuomo's second phase, firms will need to put into place plans for a re-opening that would include social distancing practices and adequate personal protective equipment.

The southern state of Georgia also began reopening its economy on Friday, allowing gyms, hair salons and tattoo shops to begin serving customers again, while Alaska, South Carolina, Tennessee and Texas also began to allow restaurants and other establishments to serve customers.

CMC Markets' David Madden pointed out that there was "a feeling in the markets that things are starting to go back to normal, albeit at a very slow pace".

However, gains were somewhat kept in check by another drop in oil prices, with West Texas Intermediate crude dropping 27.63% to $12.26 a barrel.

In corporate news, the coming week was set to be the busiest so far this earnings season - with the likes of Alphabet, Amazon, Apple, Boeing, Exxon Mobile, Intel and Tesla all reporting over the next five days.

IG analyst Joshua Mahony said: "This week marks the beginning of perhaps the most important four days in Q1 earnings season, with over a quarter of the S&P 500 reporting. With big hitters across tech, travel, energy, and manufacturing all due to shed light on their coronavirus experiences, we will finally have a much better idea of exactly how this crisis has affected USA Inc.

"Markets have been very focused on future prosperity over current suffering, and thus it is likely that market sentiment will be guided heavily by corporate outlooks rather than just the short-term impact of the temporary lockdown measures."

On the macro front, Texas factory activity declined further in April, according to business executives responding to the Dallas Federal Reserve's manufacturing activity index. The production index, a key measure of state manufacturing conditions, pushed further negative from -35.3 to -55.3, suggesting the contraction in output has steepened since last month.