Stock rise despite more bad jobs data

Private employers shed 20.236 million jobs in April as the economy shut down to control the spread of the coronavirus, payroll company ADP reported Wednesday.

It's the biggest drop in the history of the company's survey, but investors shrugged off ADP's unemployment numbers and stocks rose in early trading as investors continued to bet the economy will rebound as businesses reopen.

"Job losses of this scale are unprecedented," Ahu Yildirmaz, co-director of the ADP Research Institute, which collaborates with Moody's Analytics to compile the report, said in a statement. "The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession."

The recession of 2008-2009 was triggered by the collapse of the subprime mortgage market.

In the current downturn, about 30 million people have filed unemployment claims in the last six weeks, the US Labor Department reported.

ADP said job losses were most severe in the hospitality sector and totaled 8.6 million. Restaurants and bars were ordered to close during the coronavirus pandemic, also called COVID-19.

Other hard-hit sectors included trade, transportation and utilities (3.44 million job losses), construction (2.48 million), manufacturing (1.67 million), professional and business services (1.17 million), information services (309,000) and financial services (216,000), the ADP survey found.

The US Labor Department's report, issued the first Friday of the month, is compiled using a survey of company payrolls conducted by the Bureau of Labor Statistics. ADP's report relies on its clients' payroll data to calculate employment trends in the private sector. It therefore has a narrower base.

The reports often provides different numbers. The Labor Department's figures are considered the official jobs report.

In early trading, the Dow Jones Industrial Average gained 60.73 points, or 0.28 percent, to 23946.47. The S&P 500 rose 0.41 percent. The Nasdaq Composite gained 0.94 percent.

West Texas Intermediate crude, the guide of US oil prices, fell $0.73 to $23.83 a barrel in early trading Wednesday. Brent crude, the worldwide benchmark, lost $0.56 to $30.41. Oil is a proxy for future economic activity.

General Motors said first quarter profit fell to $294 million, down from $2.2 billion for the same period a year ago. Revenue totaled $32.7 billion, down 6 percent from $34.9 billion a year ago.

Of the major US-based auto companies, GM has the largest operations in China where the coronavirus outbreak shuttered factories in January.

GM halted North American production in March. The company has collaborated with the United Auto Workers union to assure safety and hopes to restart most assembly lines in the US and Canada May 18.

In early trading, GM's stock rose 6.96 percent.

Disney said the coronavirus pandemic cut second quarter net income by 91 percent from the same period a year ago to $475 million as theme parks closed in China, Europe and the US due to the coronavirus pandemic and from cost associated with consolidation of 21st Century Fox assets acquired in 2019.

The company expects the current quarter will be worse, but the believes sales by its new streaming service, Disney+, will increase.

In early trading, Disney's stock slipped 0.08 percent.

Wendy's, operator of fast-food restaurants, said reported first-quarter net income of $14.44 million, down from $31.89 million for the same period a year earlier. Sales fell 1 percent to $405 million.

But the company said sales are rebounding after dropping in March and the first half of April as people stayed home to avoid spreading the coronavirus.

In early trading, Wendy's rose 6.80 percent.

CVS Health said revenue in the first quarter rose 8.3 percent to $66.8 billion from $61.6 billion for the same period a year ago. Net income rose to $2.01 billion from $1.42 billion.

"When facing any health crisis, including this pandemic, we're uniquely positioned to understand consumer and patient needs and how to address them," Larry Merlo, the company's CEO, said in a statement.

In early trading, CVS Health rose 3.37 percent.