By C Nivedita and Medha Singh
(Reuters) – U.S. stocks jumped on Thursday as investors were encouraged by PayPal’s outlook and an unexpected rise in Chinese exports, which raised hopes of an economic recovery.
The payments processor rose 11.8%, providing the biggest boost to the S&P 500 after it forecast a strong recovery in payments volumes in the second quarter as social distancing drives more people to shop online.
Its shares helped the technology index rise 1.4% while larger peer Visa Inc gained 2.7%, the biggest support for the Dow Jones Industrials.
Energy stocks rose 2.6%, the most among 11 major sectors on optimism around future oil demand after China’s overseas shipments in April rose for the first time this year as factories raced to make up for lost sales.
“With expectations just set so low, any positive news is really being welcomed, and the continuing negative news, to some extent, is being pushed to the side,” said Rick Meckler a partner at Cherry Lane Investments in New Vernon, New Jersey.
U.S. stock indexes have rebounded sharply from a coronavirus-fueled selloff in March, powered by monetary and fiscal stimulus and, more recently, hard-hit states reopening businesses following sweeping lockdowns.
Wall Street’s fear gauge fell back near levels it was trading at in early March, before volatility leapt to 12-year highs due to the worldwide spread of COVID-19. However, the S&P 500 still about 15% below its Feb. record high.
Latest data showed 3.17 million Americans applied for state unemployment benefits last week, but the number marked the fifth straight weekly decrease in applications and raised hopes the worst of the outbreak’s impact on the labor market was over.
The Labor Department’s more comprehensive nonfarm payroll report is due on Friday.
“We’re looking into the exit from lockdown, so now’s probably not the day that markets should be worrying too much about the economic data, they’re looking forward to the recovery,” said Edward Park, deputy chief investment officer at London-based firm Brooks Macdonald.
At 10:09 a.m. ET, the Dow Jones Industrial Average was up 283.17 points, or 1.20%, at 23,947.81, the S&P 500 was up 34.99 points, or 1.23%, at 2,883.41 and the Nasdaq Composite was up 98.48 points, or 1.11%, at 8,952.87.
Lyft Inc surged 20.1% as the ride-hailing company posted higher-than-expected revenue and vowed to further cut costs to become profitable. Rival Uber Technologies, which is expected to report results after markets close, gained 8.8%.
Weapons maker Raytheon Technologies Corp jumped 0.9% to lead gains among Dow components, as Chief Financial Officer Toby O’Brien said he expected positive free cash flow in 2020, primarily driven by its defense business.
About 350 of the S&P 500 companies have reported so far and first-quarter earnings are expected to have fallen 12.4%, with analysts expecting an earnings recession by the second quarter, according to Refinitiv data.
Advancing issues outnumbered decliners more than 4-to-1 on the NYSE and 2-to-1 on the Nasdaq.
The S&P index recorded seven new 52-week highs and no new low, while the Nasdaq recorded 40 new highs and three new lows.
(Reporting by C Nivedita and Medha Singh in Bengaluru; Editing by Sagarika Jaisinghani and Bernard Orr)