By Geoffrey Smith
Investing.com -- U.S. stock markets opened sharply higher on Wednesday, as the revival of Joe Biden’s presidential campaign limited the risk of a radical left-wing administration under Bernie Sanders after November.
Biden swept southern and eastern states in the Democrats’ Super Tuesday primaries, overtaking Sanders in the delegate count. Sanders’ only victory of note came in California. The two candidates are now the only ones with a realistic chance of winning the Democratic nomination.
The market took a more favorable view, on reflection, of the Federal Reserve’s emergency interest rate cut on Tuesday, seeming to accept that it was likely to reduce risks in the financial system and, as Fed Chair Jerome Powell claimed, provide a “meaningful boost” to the economy.
New data earlier showed the U.S. economy, or at least its labor market, still in decent health in February, as the ADP (NASDAQ:ADP) Payrolls report rose by a stronger-than-expected 183,000. While that was above expectations for private job gains of 170,000, it was down from January’s 209,000 – a figure that was itself revised down sharply from the initial estimate of 291,000.
By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was up 494 points or 1.9%, while the S&P 500 was up 1.5% and the Nasdaq Composite was up 1.3%. All three indices had posted heavy losses on Tuesday on the perception that the Fed’s move was panicked and likely to be ineffective in limiting the economic losses from the spreading outbreak.
Among individual stocks, General Electric (NYSE:GE) rose 1.2% after upholding its forecast for 2020 cash flow, even though it said it expected Covid-19 impacts to shave between $300 million and $500 million off cash flow in the first quarter.
Elsewhere, retailer Nordstrom (NYSE:JWN) stock fell 1.4% after missing forecasts for its holiday quarter profit, while the simplification of its top leadership structure, which will leave Erik Nordstrom as CEO, was met with a shrug.
Elsewhere, U.S. crude oil futures extended their rebound to $47.70 a barrel, up 1.1% on the day, amid reports that the OPEC+ alliance is under pressure from Saudi Arabia to cut over 1 million barrels a day more in output.