Stocks finished higher Wednesday, clawing back some losses from the previous two sessions, as investors assessed mixed earnings reports but remained rattled by the damage the coronavirus pandemic has wrought on oil markets.
Oil prices were higher Wednesday after President Donald Trump instructed the U.S. Navy to "shoot down" any Iranian gunboats that harass American ships in the Gulf.
The tweet from the president appeared to be a reference to previous alleged attacks by Iranian ships in the region on Saudi Arabian tankers hauling crude to customers in Asia and around the world.
The Dow Jones Industrial Average finished up 456 points, or 1.99%, to 23,475, the S&P 500 rose 2.29% and the Nasdaq gained 2.81%.
June futures for Brent crude, the global benchmark, rose 7.4% to trade at $20.76 a barrel on Wednesday while West Texas Intermediate crude jumped 21% to $13.96. WTI crude, the U.S. benchmark, fell to all-time lows earlier this week.
"Activity in the oil market is proving just how mercurial it can be. Oil continues to take center stage, but this morning it’s for different reasons as tensions with Iran return," said Mike Loewengart, managing director on investment strategy for E*Trade.
"While contracts are back in the green, make no mistake this is still far from covering basic drilling costs and overhead. More importantly, the longer-term implications of the current oil crisis have yet to be fully realized - putting increased pressure on oil and gas earnings and the energy sector overall."
Stocks on Tuesday declined for a second day, hit hard again by the plunge in oil prices. The Dow slid 631 points, or 2.7%, to 23,018, the S&P 500 slumped 3.1% and the tech-heavy Nasdaq tumbled 3.5%.
Meanwhile, the Senate approved a $483 billion coronavirus aid package for small businesses that adds funding for hospitals and virus testing programs. The House plans to vote on the package Thursday.
AT&T (T) - Get Report posted modestly weaker-than-expected expected first-quarter earnings and pulled its full-year profit guidance as the global coronavirus pandemic clipped its bottom line.
The telecommunications giant added 163,000 new monthly phone subscribers over the first quarter, a better-than-expected increase.
Delta Air Lines (DAL) - Get Report reported a steep quarterly loss as the coronavirus pandemic and the damage it has done to global travel cost the carrier millions. The Atlanta carrier did note that it has enough cash on hand to continue operations for the time being.
The airline said it had $6 billion in cash on hand at the end of the quarter, though it had burned cash at a rate of $100 million a day. Delta said it was looking to get that figure down by half by the end of June while beefing up liquidity.