Stock Market Wrap-Up: Tesla Delivers the Goods; Oil Giants Jump

Wall Street had a good day on Thursday, as market participants were able to look past the challenges of the coronavirus pandemic to anticipate a possible recovery in the long run. The Dow Jones Industrial Average (DJINDICES: ^DJI) saw plenty of volatility, trading lower at a couple of points during the day. In the end, major benchmarks were all up in the neighborhood of 2%, with the S&P 500 (SNPINDEX: ^GSPC) leading the way and the Nasdaq Composite (NASDAQINDEX: ^IXIC) lagging slightly behind.

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Data source: Yahoo! Finance.

Investors were anxious during the regular trading session about whether Tesla (NASDAQ: TSLA) would be able to get its electric vehicles delivered to customers in the first quarter, but good news after the market's close allowed shares to recover. Meanwhile, oil stocks also surged on a rise in crude prices, continuing a recovery run that's lifted companies like BP (NYSE: BP) substantially off their March lows.

Good news from Tesla

Tesla's stock was down 6% from Wednesday's closing price as of 4 p.m. EDT. But the release of delivery figures turned things around, and just 15 minutes later, the stock had gained more than 10% to climb back above $500 per share.

Tesla Roadster on pavement in front of a desert landscape, with the sun near the horizon.

Image source: Tesla.

Tesla's numbers were especially impressive in the shadow of the coronavirus outbreak. The automaker produced almost 102,700 vehicles during the first three months of 2020, including 87,300 Model 3 and Model Y cars and SUVs and 15,400 Model S and X upscale vehicles. Deliveries lagged somewhat, but 88,400 total deliveries still came in well ahead of the reduced estimates that many analysts had projected because of the pandemic.

Tesla's performance supported the bullish argument that buyers of the premium electric vehicles are more likely to be able to afford discretionary purchases even in the wake of massive economic disruptions and stock market losses. Yet some skeptics still think that Tesla faces further challenges in the second quarter, as orders to stay at home will make it more difficult to maintain production activity and keep Tesla vehicles moving. For now, the bulls have won another round, and CEO Elon Musk is claiming victory for another successful quarter even under tough conditions.

Oil majors gain ground

Thursday was also a good day among energy stocks. BP (NYSE: BP) finished higher by 7%, with most major integrated oil companies seeing similar gains.

The news stemmed from the nearly $5 per barrel rise in oil prices, sending West Texas Intermediate crude back above $25. Comments from President Trump suggested that Russia and Saudi Arabia might end their efforts to boost production, with Russia's goal apparently to price out higher-cost operations among U.S.-focused exploration and production companies.

Many U.S. producers have announced reductions in the amount they're budgeting for capital spending in 2020, citing the slump in crude. Other measures have included slashing dividends and eliminating stock buybacks as they wait for oil prices to recover.

For majors like BP, though, survival is a lot easier even at current low prices. As long as there's some floor on the price of oil, BP and its peers can prioritize production and capital spending to maximize their chances of getting through tough times unscathed -- and putting themselves in position to take advantage of bargain opportunities among harder-hit energy stock peers.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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