MANHATTAN (CN) — As America gradually reopens, Wall Street is hopeful retailers can successfully navigate snags in supply chains and other problems.
The Dow Jones Industrial Average, which gained 250 points at the morning bell, shed some of those gains to gain 133 points for the day, a 0.5% increase.
Unlike most days recently, Tuesday brought no blockbuster news, good or bad, with investors instead focused on plans to slowly reopen various portions of the U.S. economy.
About 39 states have already begun to ease lockdowns, and retail stores are champing at the bit to open their doors. Starbucks said it plans to soon reopen 85% of its coffee shops nationwide by the end of the week.
Consumer spending is also pointing up, according to a report by The NPD Group. The report found sales during the week ending April 25 did not decline year over year, the first time since early March no such decline was seen.
As lockdowns ease, oil prices have gone back up. Since last week, barrels of crude on the West Texas Intermediate have risen by double digits to reach about $25 a barrel Tuesday. While the prices are still fairly low, they are a far cry from the dismal prices for May’s contract traded last month.
“Oil prices moving up nicely as demand begins again!” tweeted President Trump, who has been keenly interested in oil prices and helped spur negotiations between Saudi Arabia and Russia in their price war.
But the move to reopen America may be too quick for some.
According to a poll of about 500 adults surveyed by the Washington Post and University of Maryland, more than half of Americans are comfortable going to a supermarket, but two-thirds are uncomfortable shopping at a clothing store and nearly four-fifths don’t like the idea of dining at a restaurant.
The poll found about 70% of respondents think gun stores, barber shops or nail salons should not be allowed to reopen.
Supply-chain breakdowns have also complicated retail’s comeback. Meat shortages have caused Wendy’s to sell fewer burgers, while wholesalers Costco and Sam’s Club have restricted how much meat consumers can buy during each trip.
Overall, manufacturing has taken its lumps, with earnings reports showing manufacturing companies suffering a consistent drop in sales throughout the world.
Infrastructure leader AECOM reported a 5% drop in revenue from the same quarter last year and a 6% drop in net income. The company noted in its earnings release that it has not had any major infrastructure project cancellations due to Covid-19.
Global water technology company A.O. Smith reported a massive year-over-year drop in earnings, from $89 million in 2019 to $51 million this year, while leading chemical company DuPont de Nemours posted a $610 million drop in net income last quarter. DuPont’s net sales fell 4% to $5.2 billion versus one year ago.
In agriculture, AGCO, which manufactures farming equipment, actually improved during the first quarter of 2020, seeing a slight increase in net income boosted mainly by its North America region, which saw net sales increase by 11%. The company’s other regions all fared poorly, though, with consistent drops in net sales, and a large 18% decrease in sales in its Asia-Africa region.
The services industry also has had a rough go last month, according to data by the Institute for Supply Management. The ISM nonmanufacturing index dropped from 52.5 in March to 41.8 in April, the largest contraction for the index since early 2009.