MANHATTAN (CN) — Bracing for a consumer confidence index expected later this morning, investors focused on positive corporate earnings in early trading Tuesday.
The Dow Jones Industrial Average gained 400 points at open, a 1.6% increase. The S&P 500 and Nasdaq had gains of 1.4% and 1%, respectively.
Very few earnings reports so far have been positive, with even normally recession-resistant companies IBM and Coca-Cola showing significant declines in revenue.
Further, most companies have withdrawn their 2020 guidance in the face of uncertain deadlines for social distancing and the possibility of a resurgence of the respiratory disease Covid-19 in the fall.
But some flickers of a reviving economy can be seen.
Manufacturing leader 3M — which makes the N95 respirator masks used by health care workers fighting the pandemic — on Tuesday reported a 2.7 year-over-year increase on sales to $8.1 billion. The company also reported earnings per share of 47%, a drop in expenses, and noted it had paid $847 million in quarterly cash dividends to shareholders.
“Given the breadth and diversity of our businesses, the financial impact of Covid-19 is varying across 3M,” CEO Mike Roman said in a statement, noting the company’s personal safety products saw an obvious uptick in sales.
Other leading companies reported positive gains during the first quarter of 2020. Beverage and snacks company PepsiCo. beat market expectations and posted net revenue growth of 7.7% and nearly a dollar increase in earnings per share.
Keurig Dr. Pepper’s first quarter also showed some bright spots. The beverage company reported a 4.4% increase of net sales year-over-year during the first quarter of 2020. Its diluted earnings per share fell $0.11, however, reflecting an issuance of $1.5 billion in senior notes.
Corporate earnings for major companies, most notably Starbucks, will start to roll in later today after markets close. On Wednesday, corporate giants Microsoft, Tesla and Facebook will report earnings.
The Conference Board will issue its U.S. consumer confidence index later Tuesday morning.
A shadow lingers over other markets, most notably oil.
Prices for the June contract of West Texas Intermediate crude has been gradually dropping since Monday and now hovers at just over $11 per barrel, while prices of the international Brent are flat at $20 per barrel.
In Asia, most markets closed slightly down for the day, with only Hong Kong’s and South Korea’s markets seeing an increase by the closing bell.
Markets in Europe, where countries have been gradually returning to normal — or the new approximation of normal — have been showing some optimism. As of 8:30 a.m. EST, major European markets were up more than 1.7% across the board.
More than 3 million people worldwide have been confirmed infected by Covid-19, according to data from researchers at Johns Hopkins University, and more than 211,000 have died. In the United states, 988,000 people have contracted the novel coronavirus and 56,000 have died.
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