Wall Street opens higher as global markets remain unsettled

Photo: The Canadian Press

Stocks climbed on Wall Street at the opening of trading Wednesday. Maybe this time it will last.

A big gain for the S&P 500 suddenly vanished the day before, and trading remained unsettled around the world Wednesday. Asian stock markets were mixed and European indexes fell.

The S&P 500 was up 0.6% after the first 20 minutes of trading. The Dow Jones Industrial Average rose 170 points, or 0.7%, to 22,813 and the Nasdaq was up 0.6%.

Canada's main stock index rose at the start of trading, helped by gains in the energy and industrial sectors, while U.S. stock markets also climbed higher.

The S&P/TSX composite index was up 73.03 points at 13,687.17.

In New York, the Dow Jones industrial average was up 306.62 points at 22,960.48. The S&P 500 index was up 30.61 points at 2,690.02, while the Nasdaq composite was up 91.88 points at 7,979.14.

The Canadian dollar traded for 71.31 cents US compared with an average of 71.50 cents US on Tuesday.

Markets have been incredibly volatile in recent weeks as investors blindly guess how badly the coronavirus outbreak will hurt corporate profits amid suffocating uncertainty. The economic damage is widespread, and France’s central bank said its economy entered a recession with a 6% drop in the first three months of the year.

Countering that has been unprecedented aid from governments and central banks. Some investors are also pointing to nascent signs that infections and deaths may soon be peaking or plateauing in several hotspots around the world.

Caught between those forces are investors, who have sent the S&P 500 down about 20% from its record set in February. Earlier, it had fallen as much as a third from that mark, reflecting investors’ expectations for a steep, sudden recession and drops in corporate profits. Where stocks go from here depends on how long it takes for the economy to reopen and get closer to what used to be normal.

Stocks that have been beaten down the most since the sell-off began in February were leading the market Wednesday, including energy companies, retailers, airlines and other travel-related companies. That was also the early trend of Tuesday, before the gains vanished.

European stocks dipped as finance ministers clashed over a proposal to borrow as a collective to pay for the health crisis. Countries that have been hardest hit there by COVID-19 are also among those that can least afford to pay for it, such as Italy and Spain. But the outbreak is dragging on economies across the continent. German economists predict its economy will shrink 4.2% this year.

Germany’s DAX slipped 0.2%, and France’s CAC 40 fell 0.6%. The FTSE 100 in London lost 0.7%.