Stocks halted a two-day slide as investors digested earnings reports from the likes of AT&T (T), Kimberly-Clark (KMB) and Netflix (NFLX) and looked forward to the passage of new support measures from the federal government. The Senate passed a $484B relief package to replenish the small business loan program and House leader Pelosi has said the bill will pass the House shortly. Meanwhile, Treasury Secretary Steve Mnuchin said he anticipates most of the economy will restart by the end of August, adding to what appears to be an optimistic trading environment following two days of pulling back.
ECONOMIC EVENTS: In U.S. data, the FHFA house price index increased 0.7% to 287.0 in February.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now about 2.6M confirmed cases of COVID-19. In New York, Governor Andrew Cuomo reported 474 coronavirus-related deaths in the state yesterday, saying that the state is "past the apex" of the outbreak. Cuomo noted that he had a "productive visit at the White House" with President Trump, adding that "we have a plan going forward."
Additionally, Reuters' Joe Brock said that business leaders worldwide are forecasting a "drawn-out U-shaped recession" as a result of the COVID-19 pandemic. "Around 60% of chief executives are preparing for a U-shaped recovery - a long period between recession and an upturn - compared with 22% who predict a double-dip recession," according to an April 15-19 poll of 3,534 chief executives conducted by YPO, added the Reuters story.
TOP NEWS: Shares of Netflix (NFLX) fell 2.9% following last night's quarterly report. While the streaming company reported a big jump in subscribers amid the COVID-19 pandemic, Netflix also said that given the uncertainty on home confinement timing, predicting future subscriber growth was "mostly guesswork."
Shares of Snap (SNAP) surged 36.6% following its Q1 results, which included in-line losses, above consensus revenue, and better than expected user engagement. Oppenheimer analyst Jason Helfstein upgraded Snap to Outperform from Perform with an $18 price target, telling investors in a post-earnings research note that the company is "executing on all metrics."
Meanwhile, AT&T (T) shares closed 1.2% lower after the company reported worse than expected revenue for the first quarter and withdrew its financial guidance. Randall Stephenson, AT&T Chairman and CEO, attributed a 5 cents per share impact on its first quarter earnings from the COVID pandemic, stating that "without it, the quarter was about what we expected - strong wireless numbers that covered the HBO Max investment, and produced stable EBITDA and EBITDA margins."
Shares of L Brands (LB) dropped 15.6% after Bloomberg reported that Sycamore Partners is seeking to terminate its agreement with the company regarding the Victoria's Secret brand. Following the report, L Brands confirmed that Sycamore Partners delivered a notice on April 22, "purporting to terminate" the transaction agreement relating to the sale of a 55% interest in Victoria's Secret Lingerie, Victoria's Secret Beauty and PINK. L Brands said it believes that Sycamore's purported termination of the agreement is invalid and that the company "will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights" while continuing its work towards closing the transactions contemplated by the pact with the private equity firm.
Additionally, Delta Air Lines (DAL) fell 2.7% after reporting revenue that was worse than expected in the first quarter but losses that were not as steep as analysts' average forecast. "With the significant impact of COVID-19 on Delta's revenue, we were burning $100 million per day at the end of March. Through our decisive actions, we expect that cash burn to moderate to approximately $50 million per day by the end of the June quarter," said CFO Paul Jacobson.
MAJOR MOVERS: Among the noteworthy gainers was Expedia (EXPE), which rose 7.3% after The Wall Street Journal reported that the company was in talks to sell a stake in itself to private equity firms Silver Lake and Apollo (APO). Also higher were Healthcare Services (HCSG), Chipotle (CMG), and Kimberly-Clark (KMB), which gained a respective 14.2%, 12.1%, and 2.4% after reporting quarterly results.
Among the notable losers was United Airlines (UAL), which declined 7.2% after filing to sell 39.25M shares of common stock. Also lower were Biogen (BIIB) and Interactive Brokers (IBKR), which fell 9.4% and 8.8%, respectively, after their quarterly reports.
INDEXES: The Dow rose 456.94, or 1.99%, to 23,475.82, the Nasdaq gained 232.15, or 2.81%, to 8,495.38, and the S&P 500 advanced 62.75, or 2.29%, to 2,799.31.