Stocks fell Thursday after the Labor Department’s latest print on new weekly jobless claims showed a greater than expected 3.8 million individuals filed for initial unemployment insurance last week.
However, rallies earlier in the month pushed the S&P 500 to post its best monthly gain since 1987. The blue-chip index was up 12.68% for April. The Dow rose 11% for April, and the Nasdaq jumped 15.45%.
Market participants took most of the recent major corporate earnings results in stride, even as the impacts of the coronavirus permeated commentary in the reports. Facebook and Microsoft each reported quarterly sales growth over last year, as the company’s products and services showed strong demand at the start of the pandemic’s domestic escalation. Shares of each of these companies rose during Thursday’s session.
A day earlier, positive results from a clinical trial of Gilead’s coronavirus antiviral treatment candidate helped fuel a sharp rally in stocks on Wednesday, with each of the three major indices up at least 2.2%. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, said the results were “quite good news,” stoking investor optimism.
Hopes for the near-term approval of a treatment and prospects that this could expedite a return to some semblance of normalcy for businesses closed during the coronavirus outbreak eclipsed the latest batch of dismal economic data on Wednesday. U.S. gross domestic product contracted by the most since the fourth quarter of 2008 in the first three months of the year, and consumer spending – the biggest portion of domestic economic activity – shrank by the most in 40 years.
The coming months are likely to be even worse. But as expectations grow more somber, policymakers reaffirmed their commitment to support the domestic economy with a wide range of stimulus measures. On the heels of a pair of emergency rate cuts and unscheduled new programs released over the past month, the Federal Reserve said on Wednesday it would keep interest rates near zero for the foreseeable future, “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
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4:03 p.m. ET: Dow falls 288 points, or 1.2%, after weekly unemployment claims come in higher than expected
Here were the main moves in markets as of 4:03 p.m. ET:
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S&P 500 (^GSPC): -27.08 (-0.92%) to 2,912.43
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Dow (^DJI): -288.14 (-1.17%) to 24,345.72
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Nasdaq (^IXIC): -25.16 (-0.28%) to 8,889.55
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Crude (CL=F): +$3.94 (+26.16%) to $19.00 a barrel
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Gold (GC=F): -$16.90 (-0.99%) to $1,696.50 per ounce
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10-year Treasury (^TNX): -0.5 bps to yield 0.6220%
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2:45 p.m. ET: WTI crude oil futures rally 25% to settle at two-week high
U.S. West Texas intermediate crude oil June futures settled higher by 25%, or $3.78, to $18.84 on Thursday, reversing some of the steep declines seen in recent sessions as investors considered mounting supply and demand challenges for the commodity. Thursday’s settlement marked a two-week high for WTI prices.
Still, domestic crude oil prices ended April with a month-to-date loss of 8%.
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11:34 a.m. ET: Stocks hold lower as investors digest economic data, earnings
Stocks remained lower as Thursday’s session chugged along, with the Utilities and Materials sectors leading declines in the S&P 500. Raytheon Technologies and American Express lagged in the 30-stock Dow.
The Nasdaq outperformed against the S&P 500 as big tech stocks including Microsoft, Facebook and Tesla held onto earlier gains.
Here were the main moves in markets, as of 11:34 a.m. ET:
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S&P 500 (^GSPC): -24.27 points (-0.83%) to 2,915.24
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Dow (^DJI): -256.41 points (-1.04%) to 24,377.45
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Nasdaq (^IXIC): -15.04 points (-0.17%) to 8,900.12
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Crude (CL=F): +$3.28 (+21.78%) to $18.34 a barrel
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Gold (GC=F): +$3.50 (+0.2%) to $1,716.90 per ounce
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10-year Treasury (^TNX): -3.7 bps to yield 0.59%
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10:15 a.m. ET: Fed expands scope of Main Street loan program
The Federal Reserve expanded the scope of its $600 billion Main Street loan facility, increasing the amount of eligible businesses and lowering the minimum loan size.
The changes mean companies with as many as 15,000 employees, or up to $5 billion in annual revenue, will be eligible for the four-year, low-cost loans. The original requirements capped eligibility at companies with up to 10,000 employees and $2.5 billion in annual sales.
The Fed also halved the minimum loan size available under the program to $500,000.
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9:42 a.m. ET: Stocks tumble after jobless claims report
Here were the main moves in markets, as of 9:42 a.m. ET:
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S&P 500 (^GSPC): -30.11 points (-1.02%) to 2,909.4
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Dow (^DJI): -320.45 points (-1.3%) to 24,313.41
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Nasdaq (^IXIC): -27.8 points (-0.32%) to 8,885.75
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Crude (CL=F): +$2.02 (+13.41%) to $17.08 a barrel
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Gold (GC=F): -$1.10 (-0.06%) to $1,712.30 per ounce
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10-year Treasury (^TNX): -3.2 bps to yield 0.595%
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8:31 a.m. ET: Consumer spending sank by a record in March amid virus
Personal spending in the U.S. plunged by a record 7.5% in March, the Bureau of Economic Analysis (BEA) announced Thursday. This also outpaced consensus expectations for a drop of 5.1%, according to Bloomberg compiled data.
Personal income dropped by 2.0% in March after a 0.6% rise in February. This was greater than the 1.7% drop expected by consensus economists.
“The decline in March personal income and outlays was, in part, due to the response to the spread of COVID-19, as governments issued ‘stay-at-home’ orders,” the BEA said in a statement. “This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending.:
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8:30 a.m. ET: New initial jobless claims totaled 3.839 million last week
New weekly unemployment insurance claims were 3.839 million for the week ended April 25, the Labor Department said Thursday. This was above consensus expectations for claims to total 3.5 million in the latest report, according to Bloomberg-compiled data.
The previous week’s initial unemployment claims was revised up to 4.442 million from the 4.427 million reported earlier.
Continuing jobless claims, reported on a one-week delay, were 17.992 million for the week ended April 18, a fresh record high. This came following a slightly downwardly revised 15.818 million for the prior week. Consensus economists expected continuing claims to total 19.476 million for the week ended April 18.
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7:45 a.m. ET: European Central Bank holds interest rates steady, announces new pandemic refinancing operation
The European Central Bank (ECB) on Thursday announced its decision to leave its main refinancing rate and deposit facility rate unchanged at 0% and -0.5%, respectively, as had been widely anticipated by economists. The interest rate on its marginal lending facility was also left unchanged at 0.25%.
The central bank unleashed a “new series of non-targeted pandemic emergency longer-term refinancing operations (PELTROs)” to help support liquidity conditions in money markets. It also reaffirmed its commitment to its previously announced pandemic emergency purchase program (PEPP), which has “an overall envelope of 750 billion euros, to ease the overall monetary policy stance and to counter the severe risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the coronavirus pandemic.”
“The Governing Council is fully prepared to increase the size of the PEPP and adjust its composition, by as much as necessary and for as long as needed,” the ECB said. “In any case, it stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry.
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7:20 a.m. ET: Twitter reports record user growth as pandemic drives consumers to platform
Twitter (TWTR) posted better than expected first-quarter sales and user growth over last year, with average monetizable daily active users hitting 166 million during the period.
“Average monetizable DAU (mDAU) grew 24% year over year, driven by typical seasonal strength, ongoing product improvements, and global conversation related to the COVID-19 pandemic,” the company said in a statement. “This is our highest reported year-over-year growth rate to date. We have added 14 million average mDAUs since the previous quarter.”
Revenue of $808 million grew about 3% over last year, “reflecting a strong start to the quarter that was impacted by widespread economic disruption related to COVID-19 in March.”
Total advertising revenue of $682 million grew by $3 million over last year, but weakened sharply at the end of the quarter, presaging a tougher second quarter as the coronavirus pandemic escalated. From March 11 until March 31, Twitter’s total advertising revenue dropped 27% over last year. Twitter added that the latter part of Q1 was “challenging for the conversation around live sports and their highlights on Twitter as professional sports leagues suspended operations in light of the COVID-19 pandemic,” but added that “many content partners quickly adapted.”
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7:05 a.m. ET: McDonald’s reports 22% drop in global same-store sales in March as pandemic undercut restaurant revenue
McDonald’s, a Dow component, reported a drop in first-quarter sales and profitability over last year as the COVID-19 pandemic pushed consumers to stay in their homes and away from restaurants.
First-quarter revenue of $4.71 billion fell 6% over last year, and adjusted earnings per share of $1.47 were down 25 cents. Global same-store sales fell 3.4% in the first quarter, after a 22% drop in March outweighed an about 7% climb in January and February.
In the U.S., same-store sales inched up by 0.1% in the first quarter. U.S. same-store sales in March declined by 13.4%, dragging after an 8% rise in January and February.
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7:02 a.m. ET Thursday: Stock futures little changed
Here were the main moves in markets, as of 7:03 a.m. ET:
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S&P 500 futures (ES=F): down 11.75 points, or 0.4%, to 2,929.25
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Dow futures (YM=F): down 53 points, or 0.22%, to 24,513.00
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Nasdaq futures (NQ=F): up 6.5 points, or 0.07%, to 9,043.00
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Crude (CL=F): +$2.41 (+16.00%) to $17.47 a barrel
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Gold (GC=F): +$15.30 (+0.89%) to $1,728/70 per ounce
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10-year Treasury (^TNX): -1.9 bps to yield 0.608%
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6:06 p.m. ET Wednesday: Stock futures open higher
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:06 p.m. ET:
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S&P 500 futures (ES=F): up 11.5 points, or 0.39%, to 2,952.50
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Dow futures (YM=F): down 86 points, or 0.35%, to 24,652.00
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Nasdaq futures (NQ=F): up 53.5 points, or 0.59%, to 9,090.00
NEW YORK, NY – JANUARY 10: An empty trading floor is seen after the closing of the New York Stock Exchange (NYSE) on January 10, 2020 in New York City. Amid new sanctions on Iran and 145k more U.S. jobs added and wage growth in December, the Dow topped the 29,000 milestone before pulling back to 28,823.77. (Photo by Kena Betancur/Getty Images)
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