S&P 500, Nasdaq up as tech stocks rise

The S&P 500 and Nasdaq rose on Wednesday on hopes of a pickup in business activity as states eased coronavirus-induced curbs, with investors also looking past a stunning 20 million plunge in U.S. private payrolls last month.

Four of the 11 major S&P sectors were trading higher, with the technology index leading gains, as traders bought into stocks perceived to be resilient at a time when billions of people globally are still locked indoors.

“The leadership has come from stocks that benefit from stay-at-home economy,” said Jack Janasiewicz, portfolio strategist at Natixis Investment Managers. “For the most part people are hedging their bets, increasing their exposure to companies such as Amazon and Microsoft.”

The blue-chip Dow Jones index came under pressure from declines in oil giant Chevron Corp as crude prices fell. The S&P 500 energy sub-index dropped 2.2%.

U.S. stock indexes have rebounded sharply with a rally in April sparked by unprecedented stimulus and signs that the virus outbreak was peaking.

However, with macroeconomic data still foreshadowing a severe global recession, analysts have warned of another selloff, particularly if reopening of economies sparks another wave of infections.

Data on Wednesday showed U.S. private employers laid off a record 20.2 million workers in April, setting up the overall labor market for historic job losses last month.

The Labor Department’s more comprehensive report is due Friday, while a reading of initial jobless claims is set to be released on Thursday.

“We knew this was going to be bad, so it matches the jobless claims. A lot of the bad news for April is pretty much factored in,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“But markets are looking at a potential recovery here, we’ve got a lot of states opening up. Businesses are starting to get going again, but the question is, is it too fast?”

At 11:38 a.m. ET the Dow Jones Industrial Average was down 1.97 points, or 0.01%, at 23,881.12, the S&P 500 was up 3.50 points, or 0.12%, at 2,871.94 and the Nasdaq Composite was up 91.97 points, or 1.04%, at 8,901.09.

The S&P financials index was also among the biggest decliners as the Treasury Department said it would launch a long-planned 20-year bond to meet record government borrowing needs amid the outbreak.

In company news, General Motors Co jumped 5% after the automaker topped first-quarter profit expectations and outlined plans for a May 18 restart of most of its North American plants.

CVS Health Corp gained 2.3% after the company posted a better-than-expected quarterly profit, as its pharmacy benefits management business and drugstores benefited from customers stockpiling medicines due to COVID-19 lockdowns.

Activision Blizzard Inc rose 5.2% after raising its revenue forecast on higher demand for video games such as its “Call of Duty” amid the lockdowns.

Declining issues outnumbered advancers for a 1.96-to-1 ratio on the NYSE and a 1.27-to-1 ratio on the Nasdaq. The S&P index recorded five new 52-week highs and two new lows, while the Nasdaq recorded 40 new highs and 13 new lows.