US open: Stocks rally as earnings season kicks off
US stocks opened sharply higher at the bell on Tuesday as market participants seemingly grew more optimistic regarding the Covid-19 pandemic as corporate earnings season kicked off.
As of 1545 BST, the Dow Jones Industrial Average was up 2.73% at 24,030.20, while the S&P 500 was 2.94% firmer at 2,842.79 and the Nasdaq Composite came out the gate 3.41% stronger at 8,471.53.
The Dow opened 639.43 points higher on Tuesday after closing lower in the previous session on the back of OPEC and various other oil-producing nations reaching a deal on a massive production cut.
Sentiment was boosted after Donald Trump said on Monday that growth in new Covid-19 cases had stabilised, offering "clear evidence" that social distancing measures were working.
New York governor Andrew Cuomo also said it appeared the worst was over for the state, assuming people continued to be "smart" going forward.
The US has confirmed more than 582,000 cases of the coronavirus.
Also in focus was the beginning of corporate earnings season.
JP Morgan Chase posted record trading revenue amid the surge in volatility in the first quarter, but earnings per share of just $0.78 fell well and truly short of expectations of $1.84 after the firm added $6.8bn to loan loss provisions due to the outbreak, while Well Fargo posted first-quarter profits that also fell shy of estimates.
Johnson & Johnson cut its 2020 profit forecasts due to uncertainty surrounding the pandemic, now expecting EPS of $7.50 to $7.90 - down from previous guidance of $8.95 to $9.10 per share.
Investors were also comforted by some better-than-expected trade data from China.
China's dollar-denominated exports in March fell only 6.6% year on year, far less than the 14% feared by the markets in the wake of the country's lockdown to stymie the spread of the virus. Imports slipped by 0.9% compared with expectations for a 9.5% drop.
However, analysts at TD Securities said the good news was "unlikely to last" as a demand-side weakness would likely result in a sharp decline in exports over the next few months.
In macro news, the cost of imported goods in the States fell sharply last month as energy prices crashed.
According to the Bureau of Labor Statistics, the US import price index fell at a month-on-month pace of 3.2% in March (consensus: -3.0%), led by a 26.8% drop in energy prices.
Meanwhile, prices for agricultural exports were down by two-tenths of a percentage point on the prior month, with those for agricultural prices 0.1% lower and those for non-agricultural exports 0.2% lower.
That was the biggest one-month fall in energy prices since 2008 when they crashed 27.8%.
St Louis Federal Reserve president James Bullard will hold a briefing on Covid-19 via Zoom at 1605 BST, while Chicago Fed head Charles Evans and Atlanta Fed president Raphael Bostic will make comments at 1730 BST and 2000 BST, respectively.