Wall Street’s indexes climbed on Thursday following a clutch of upbeat earnings reports led by PayPal as investors looked past more weak jobs data caused by the coronavirus-induced economic downturn. The TSX ended almost unchanged, although a raft of earnings reports meant an active day for several individual stocks.
Energy and materials, which have lagged this year, led the way among both S&P 500 and TSX sectors.
Shares of PayPal Holdings soared and boosted the S&P 500 and the Nasdaq after the company said it expects a strong recovery in payments volumes in the second quarter as social distancing drives more people to shop online.
Shares of media company ViacomCBS Inc and ride-hailing firm Lyft also jumped after their earnings, as a first-quarter reporting season that Refinitiv estimates will show a 12% decline in earnings begins to wind down.
In Canada, gold producers and explorers were among the biggest advancers as bullion prices gained. On the downside, Bombardier lost 15% and SNC-Lavalin Group 9% after reporting earnings. Shopify, which Wednesday booted Royal Bank out of the top spot for most valuable Canadian company, closed down 1.7%. Its closing market cap of $119.1-billion allowed RBC and its market cap of $119.8-billion to reclaim the top spot - but not by much.
It’s possible Shopify shares will be under more pressure Friday. After Thursday’s close, it announced a new offering of 1.850 million Class A subordinate voting shares.
Stocks have rebounded sharply since late March from the coronavirus-fueled sell-off, helped by massive monetary and fiscal stimulus. Investors are now watching efforts by a number of states to spark their economies by easing restrictions put in place to fight the outbreak.
“Everything is going smoothly so far and I think there’s an assumption on the market’s part that that’s a good sign,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “The market is looking at this and saying so far, so good.”
Unofficially, the Dow Jones Industrial Average rose 211.25 points, or 0.89%, to 23,875.89, the S&P 500 gained 32.77 points, or 1.15%, to 2,881.19 and the Nasdaq Composite added 125.27 points, or 1.41%, to 8,979.66. The S&P/TSX Composite Index was up 2.95 points, or 0.02%, at 14,833.69.
Data showed millions more Americans sought unemployment benefits last week, suggesting layoffs broadened from consumer-facing industries to other segments of the economy and could remain elevated even as many parts of the country start to reopen.
The U.S. and Canadian employment reports for April are due on Friday.
“The market rightly or wrongly is just much more focused on what that data looks like two months from now, not what that data looks like right now,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.
Investors were also encouraged by news that China’s exports unexpectedly rose in April for the first time this year as factories raced to make up for lost sales due to the coronavirus pandemic.
Read more: Stocks that saw action Thursday - and why
Globe staff, Reuters
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