A late rally Monday coupled with states starting to ease coronavirus lockdowns and a jump in oil prices have pushed major U.S. stock market indexes higher, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
As some businesses begin the process of reopening after a coronavirus lockdown, oil prices were boosted in hopes of an increase in demand.
That helped push energy giants Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) higher in premarket trading, moving Dow Jones futures up.
Countries including Italy as well as some U.S. states are tentatively lifting some restrictions this week but at the risk of a second wave of infection as global deaths surpassed a quarter of a million.
The S&P 500 has climbed about 30% from its March lows on the back of unprecedented stimulus measures and signs of a plateau in new COVID-19 cases in many areas.
However, many market experts have warned that the rally could be tested amid the risk of another wave of virus infections and with growing evidence of damage to the economy and corporate America.
Wall Street’s main indexes snapped their two-day losing streak Monday as gains in large tech and internet companies and oil prices outweighed concerns about the latest U.S.-China tensions and downbeat sentiment from the annual meeting of Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.B)
As of 9:20 a.m. EDT, Dow Jones futures were up 1.2%. S&P 500 futures moved 1.2% higher and Nasdaq Composite futures were up 1.2%.
Stocks to Watch Today
L Brands Inc. (NYSE: LB) — The parent company to Victoria’s Secret has called off a deal to sell the lingerie line and make it private. L Brands CEO Leslie Wexner will still step down from his position. Shares of L Brands dropped 7.4%.
Apple Inc. (Nasdaq: AAPL) — Shares of the tech giant were up nearly 1% in premarket trading after a new report suggested the company can borrow money on the bond market to fund stock buybacks and dividend payments.
Skyworks Solutions Inc. (Nasdaq: SWKS) — The semiconductor company beat Wall Street expectations for revenue and earnings in its second quarter. It dropped its guidance for the next quarter. Shares of Skyworks Solutions were up 1.4%.
Treasury To Borrow Record $3 Trillion This Quarter
To help pay for a massive $2.2 trillion coronavirus stimulus package and individual and business tax deferments, the Department of the Treasury plans to borrow $3 trillion this quarter.
According to CNBC, in addition to $3 trillion this quarter, the Treasury anticipates borrowing around $677 billion in the third quarter. In all, the department borrowed $477 billion in the first quarter of 2020.
Spending to combat the coronavirus has pushed the national debt to $24.9 trillion — a 6.4% increase — just since March. The federal deficit topped $744 billion for the first six months of the government’s fiscal year — on pace to top the biggest shortfall in U.S. history.
California Borrowing From Federal Government for Unemployment
California has borrowed $348 million in federal funds so the state can continue paying unemployment benefits, according to The Wall Street Journal.
It is the first state to borrow from the federal government after receiving approval to tap into $10 billion to prop up unemployment benefits until the end of July. Illinois has received approval for $12.6 billion in loans while Connecticut was approved for $1.1 billion.
United COO Says Employees Should Consider Voluntarily Leaving
In a memo to employees, a United Airlines Holdings Inc. (Nasdaq: UAL) executive said workers should look at voluntarily leaving the struggling airline, according to CNN Business.
Company COO Greg Hart said the airline will need to “right-size” its workforce and that executive salaries have already been cut to battle the downturn spurred by the coronavirus pandemic.
What We’re Reading
Bonner & Partners: This Is the Perfect Time to Invest in Bitcoin (Money & Markets)
Some Retailers Are Too Broke to Go Bankrupt (CNN Business)
What Q1 Earnings Have Told Us So Far and What’s Coming Next (Money & Markets)
Here are the companies releasing earnings reports today:
Newmont Corp. (NYSE: NEM)
Pinterest Inc. (NYSE: PINS)
Regeneron Pharmaceuticals Inc. (Nasdaq: REGN)
Sysco Corp. (NYSE: SYY)
Walt Disney Co. (NYSE: DIS)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.