Stocks were broadly higher by Wednesday afternoon, with the Dow Jones Industrial Average (DJINDICES:^DJI) up 2.4% by 1:15 p.m. EDT. While the novel coronavirus pandemic continues to spread in the United States, reports that the White House is starting to plan for the reopening of the economy may be driving the gains.
McDonald's (NYSE:MCD) stock was up despite the fast food chain reporting plunging comparable sales in March and pulling its guidance. Shares of Apple (NASDAQ:AAPL) also rose as multiple analysts weighed in on the tech giant.
McDonald's reports rough results, pulls guidance
While fast food giant McDonald's is better suited for a world of takeout, drive-through, and delivery than most restaurants, the company still struggled in March. McDonald's reported a 22.2% decline in comparable sales for the month, driven by a 13.4% decline in the U.S. and a 34.7% decline in international markets.
Roughly 75% of McDonald's restaurants are operational globally, and the majority of those are focused on takeout, drive-through, and delivery. Most restaurants that are closed in the U.S. are in locations like malls. In Europe, restaurants have been closed entirely in certain markets, including France, Italy, and Spain.
Given the difficult environment, McDonald's plans to reduce its capital expenditures in 2020 by about $1 billion. The company has also suspended its share repurchase program, and it's helping franchisees by granting deferrals of certain rent and royalty payments in many markets.
McDonald's also joined the growing list of companies yanking their guidance due to the pandemic. McDonald's withdrew its outlook for 2020 and its long-term outlook issued in February. The company will update investors when it reports earnings on April 30.
McDonald's has plenty of cash available to weather the storm. The company raised $6.5 billion of new financing during the first quarter, on top of $3.5 billion available under a committed line of credit. Franchisees are likely less resilient, though, and McDonald's may need to provide additional financial support if sales don't rebound soon.
Shares of McDonald's were up 1% by early afternoon despite the update. The stock is now down roughly 20% from its 52-week high.
Apple news roundup
Apple stock was up 2% in the afternoon following some analyst commentary on the iPhone maker. Analysts at Piper raised their price target on Apple stock from $260 to $300 due to results from a teen consumer survey. Piper found that the iPhone and Apple Watch were the most popular products in their respective categories, and that a record 85% of those surveyed owned an iPhone.
Meanwhile, analysts at J.P. Morgan dropped their Apple price target from $350 to $335 due to weak customer engagement during the pandemic. The bank is lowering its expectations for sales in the second fiscal quarter, and it sees a return to normal sales level by the end of the third calendar quarter this year.
In other Apple news, analysts at Wedbush now put the odds that Apple launches 5G iPhones in October at just 10% to 15%. Wedbush sees continued supply chain disruption in Asia likely pushing any launch back to December.
Investors won't need to wait too long for an update on Apple's performance. The company is scheduled to report its fiscal second-quarter results after the market closes on April 30.