Stocks End Higher As Oil Prices Rebound

May 8, 2020

Stocks eliminated early losses this week, closing higher after rebounded oil prices initiated increases in energy stocks. The Dow Jones Industrial Average increased by 0.1% while the S&P 500 increased by 0.4% and the Nasdaq Composite rose by 1.2%. Small-cap stocks did not increase exponentially, with the Russell 2000 rising by only 0.2%. So far this year, the small-cap index has reduced by 24%, in comparison to the S&P 500’s large-cap drop of 17%.

After a sharp downturn in overseas stocks, large US indexes were sold early on as a number of markets opened again after a break of 3 days. Hong Kong’s Hang Seng fell by 4.2% while the Sensex in India dropped by 5.9%. DAX in Germany experienced a fall of 3.6% and France’s CAC 40 fell by 4.2%.

A rebound in energy stocks and oil prices increased U.S. stocks higher at the end of Monday’s trading session. Crude-oil futures increased by 3.1% and closed at $20.39 per barrel, increasing the energy division of the S&P 500 by 3.7%.

A Vaccine For The Coronavirus Could Be On The Horizon

During President Donald Trump’s town hall meeting on Sunday, he said that the White House is ‘very confident’ that a vaccine for the coronavirus will be available by the end of the year but that the death count could peak as high as 100,000, a much higher figure than the administration first put forward.

The New York Times reported on Monday that a number of government figures predict that deaths will almost double to reach 3,000 daily by the beginning of June.

Monday’s economic data points were also pessimistic. In April, the Italian manufacturing purchasing managers index dropped by 31.1 while the manufacturing PMI in Spain fell to a low of 30.8.

In the United States, the Census Bureau claimed that factory orders dropped in March by a much lower amount than predicted.

However, a number of health care stocks that are developing treatments for Covid-19 rose over the weekend. Stocks for Moderna (MRNA), a vaccine developer, rose by 5.4% while shares in Roche (ROG.Switzerland) increased by 0.6% after their coronavirus antibody test was approved by the FDA.