US stocks open higher on hope for economic rebound

US stocks opened higher Tuesday on continued optimism about an economic rebound and encouraging news about the development of a coronavirus vaccine.

The strength and trajectory of the recovery are unclear, but investors apparently believe the worst is over.

There are at least 10 coronavirus vaccines under development, raising hope that at least one will come to market and halt spread of the coronavirus.

Novavax said Monday it began human testing of its vaccine in Australia and expects results in July. If promising, the Gaithersburg, Maryland-based company plans to follow up with broader testing in the US.

In early trading, Novavax's stock surged 12.56 percent.

Competitors Moderna and Pfizer are among those also developing a vaccine.

In early trading, Moderna's shares fell 6.13 percent. Pfizer's stock added 0.31 percent

While still much lower than pre-pandemic levels, airline bookings appear to be increasing.

UBS, citing a "clearer path for domestic travel recovery", upgraded shares of Southwest airlines to "buy". In early trading, Southwest's stock climbed 9.28 percent.

Other airlines also benefited from hope for an economic rebound.

American Airlines rose 6.49 percent. Delta added 7.71 percent. United rose 10.94 percent.

There were 600 coronavirus-related deaths reported Sunday, the fewest since mid-April. Nevertheless, the number of deaths in the US is set to pass 100,000 this week. So far, there have been 1.6 million reported infections in the US.

Worldwide, about 350,000 people have died and total infections total about 5.5 million.

The US Federal Reserve and central banks around the world have cut interest rates and pumped money into the economy to ease the impact lockdowns.

Nevertheless, the coronavirus pandemic is expected to erode global GDP for the remainder of the year.

The International Monetary Fund said the world faces the deepest global recession since the 1930s. The World Bank believes the world's economic output will shrink 5 percent this year.

The US Centers for Disease Control and Prevention (CDC) recommends daily health checks while encouraging employees to wear cloth facemasks, observe social distancing and erect barriers between desks as needed.

Floor trading resumed Tuesday at the New York Stock Exchange with Plexiglas barriers between traders. The number of traders on the floor is limited to 25 percent of usual and facemasks are required. Traders are required to avoid public transit.

In early trading Tuesday, the Dow Jones Industrial Average gained 610.97 points, or 2.50 percent, to 25,073.77. The S&P 500 rose 2.04 percent. The Nasdaq Composite rose 1.71 percent.

On Friday, the Dow closed down 8.96 points, or 0.04 percent, at 24,465.16. The S&P 500 rose 0.24 percent. The Nasdaq Composite added 0.43 percent.

In early trading Tuesday, West Texas Intermediate Crude Oil futures, rose 3.01 percent to $34.25 a barrel. Brent crude, the worldwide benchmark, gained 1.74 percent to $36.75 a barrel.

The price of oil is an indicator of future economic activity. Rising prices suggest traders are optimistic about an economic turnaround.

Oil prices plunged during the downturn and briefly turned negative as demand fell, supply outstripped demand and storage tanks filled up, sending Whiting Petroleum and Diamond Offshore Drilling into bankruptcy.

Bankruptcies caused by the coronavirus-related downturn continue to pile up.

Hertz, a car rental company launched in 1918 with a dozen Ford Model Ts, became the latest to seek to reorganize its debts amid what it called "uncertainty."

"The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings," the company said it a statement.

National retailers J.C. Penney, Neiman Marcus and J. Crew have filed for bankruptcy protection amid the economic downturn.

But AutoZone, an auto-parts retailer for the do-it-yourself market, beat Wall Street's earnings estimates. Same-store sales, or sales at stores open at least one year, slipped 1 percent compared with the 6.3 percent decline forecast by analysts.

In early trading, AutoZone's stock rose 1.95 percent.

Hibbett Sports, an athletic footwear an apparel retailer, beat Wall Street's earnings estimates. Same-store sales fell 19.5 percent during the coronavirus outbreak, but less than the 34 percent estimated by analysts. E-commerce sales more than doubled compared with the same period a year ago.

In early trading, Hibbert's shares rose 7.62 percent.

Brewer Molson Coors said it's furloughing an unspecified number of workers in North America and Europe after sales were hit hard by the government-ordered closure of bars and restaurants to curb the spread of the coronavirus.

The company said it will suspend its quarterly dividend to conserve cash.

In early trading, the company's stock rose 1.06 percent.