Wall Street set to open higher on signs of lockdown easing

(Reuters) – U.S. stock markets were set to gain at the open on Friday as some states prepared to relax curbs imposed to contain the coronavirus outbreak, with a surprise rise in orders for U.S.-made capital goods also lifting sentiment.

From Tennessee and Texas to Ohio and Montana, governors announced plans to swiftly allow a return to business for some workplaces on signs the pandemic was peaking in some of the worst hit parts of the country.

“We are past the peak and slowly, but surely, all the states that have not had major cases will gradually re-open, and the market is taking that as a signal that demand is going to come back,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

Early sentiment was also supported by the latest $500 billion relief package that cleared the U.S. House of Representatives the previous day. The bill is with President Donald Trump, who is expected to sign it into law.

The benchmark S&P 500 .SPX is still 17% below its record high despite gaining ground this month and investors fear a deep economic slump following a crash in business activity.

On Friday, however, data showed orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, edged up 0.1% last month, compared with economists’ expectations of a 6% plunge.

“Maybe it does tell us that the potential for recovery is slightly better than what was anticipated,” Seema Shah, chief strategist at Principal Global Investors in London said.

The CBOE volatility index , known as Wall Street’s fear gauge, was down for the third straight session.

Oil-related companies Exxon Mobil (XOM.N), Chevron Corp (CVX.N), Apache Corp (APA.N) and Devon Energy Corp (DVN.N) rose between 1.6% and 6.5% in premarket trading as oil prices recovered after a historic collapse earlier in the week.

At 09:06 a.m. EDT, Dow e-minis 1YMcv1 were up 195 points, or 0.84%, S&P 500 e-minis EScv1 were up 25.75 points, or 0.93% and Nasdaq 100 e-minis NQcv1 were up 57.5 points, or 0.67%.

Overall, analysts expect a 14.1% decline in S&P 500 first-quarter earnings, with profits for the energy sector estimated to slump nearly 60%, raising fears of debt defaults, layoffs and possible bankruptcies.

Intel Corp (INTC.O) fell 4.6% after the chipmaker forecast second-quarter earnings below expectations and said it could not issue a forecast for the full year.

Verizon Communications Inc (VZ.N) inched lower as it lost 68,000 phone subscribers who pay a monthly bill in the first quarter.

American Express Co (AXP.N) posted a 76% drop in first-quarter profit as the credit card issuer braced for potential losses stemming from the coronavirus outbreak. Its shares rose 1.9%.

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