U.S. stocks climbed Thursday morning after weekly data showed the pace of job losses slowing, while Congress was expected to vote on further aid for small businesses later in the session.
How are benchmarks performing?
The Dow Jones Industrial Average DJIA, 1.39% gained 236 points, 1%, at around 23,711 while the S&P 500 SPX, 1.33% added about 30 points or 1.1% at 2,829. The Nasdaq Composite COMP, 1.40% jumped 100 points, or 1.2%, to trade near 8,594.
On Wednesday, the Dow DJIA, 1.39% advanced 456.94 points, or 2%, to finish at 23,475.82. The S&P 500 SPX, 1.33% gained 62.75 points, or 2.3%, to end at 2,799.31. The Nasdaq Composite Index COMP, 1.40% climbed 232.15 points, or 2.7%, to close at 8,495.38.
For the week so far, the Dow is off 2.8%, the S&P 500 is down 2.2% and the Nasdaq is down 1.5%.
What’s driving the market?
Another 4.4 million Americans filed for first-time jobless claims in the most recent week, slightly worse than the 4 million consensus forecast among MarketWatch-surveyed economists.
But a rise in stocks Thursday morning suggested that Wall Street may be getting inured to awful weekly data from the U.S. labor market after a month of reports indicating that millions are out of work due to COVID-19 shutdown procedures.
“Markets love information, and we’re getting more information. As ugly as it is, we have a better view into this than we did 30 days ago,” said Donald Calcagni, chief investment officer with Mercer Advisors. “Information transforms uncertainty into risk.”
There are still big unknowns — and hurdles — ahead, Calcagni said in an interview. “This White House has been a train wreck and it’s going to spook businesses and consumers if we re-open the economy too soon.”
Job losses underpin the yearning to restart the economy soon, and efforts to achieve that goal have at least partly supported gains for equity markets, which have risen in two of the past three sessions.
Speaking during a Wall Street Journal podcast, Vice President Mike Pence said the White House hopes the coronavirus epidemic will be “largely in the past” by early June, though he stopped short of predicting when the economy will be back to normal.
“We truly do believe as we move forward, with responsibly beginning to reopen the economy in state after state around the country, that by early June, we could be at a place where this coronavirus epidemic is largely in the past,” he told the Journal.
“Financial markets are making a lot of noise, pedalling hard, but going nowhere in a hurry,” said Jeffrey Halley, senior market analyst at OANDA, in a note out Thursday morning. “That makes sense when one steps back a bit, as the world has a vast amount of moving parts moving in as yet, quite uncertain directions.”
A reading of U.S. service sector activity from Markit fell to its lowest on record in April, while its manufacturing purchasing manager’s index was at an 11-year low. Sales of newly-constructed homes were at a 627,000 annual rate in March, almost precisely matching the MarketWatch consensus, and a hefty step down from February’s pace.
There is more U.S. economic data on tap Thursday: the Kansas City Federal Reserve’s manufacturing index is set to be released at 11 a.m. At 4:30 p.m., an update of the Fed’s balance sheet is due.
Meanwhile, investors have been digesting unsurprisingly bad corporate quarterly earnings results. On a year-over-year basis, the earnings-per-share growth estimate is negative-13.6%, and that rate would be negative-11.8%, if the oil sector were excluded, according to data from Refinitiv as of midday Wednesday.
Of the 84 S&P 500 companies that have reported so far, 66.7% have posted results above consensus estimates, while 28.6% have missed the mark. By comparison, over the past four quarters, 74% of companies beat estimates and 19% missed, according to the analytics company.
Which stocks are in focus?
- Snap Inc. SNAP, -2.11% shares were more than 3% lower after announcing a private offering of $750 million of convertible senior notes.
- Domino’s Pizza Inc. DPZ, -4.92% shares fell about 5% after first-quarter profit and revenue were better than expected, but same-store sales missed.
- Shares of Gap Inc. GPS, +1.82% dropped after the company said it had suspended rent payments and is in talks to renegotiate or terminate leases, or even shutter stores.
- Hershey Co. HSY, -2.52% shares lost about 4% after the company missed analyst expectations on earnings.
- Quarterly results from Intel Corp. INTC, -0.20%, Capital One Financial COF, +2.60%, and Edwards Lifesciences Corp. EW, +2.42% are due after the closing bell Thursday, according to FactSet data.
How are other markets trading?
The U.S. dollar DXY, -0.29% edged down fractionally against a basket of currency trading partners, as measured by the U.S. Dollar Index.
Overnight in Asia, Japan’s TOPIX Index 180460, +1.35% gained about 1.4% to close at 1,425.98. The Hong Kong Hang Seng HSI, +0.35% closed about 0.4% higher, at 23,977.32. The Stoxx Europe 600 SXXP, 1.19% was trading about 0.4% higher, near 331.36, and the FTSE 100 UKX, 1.01% was about 15 points higher, near 5,786.
How is MarketWatch’s oil-currency index performing?
The MarketWatch Petrocurrency Index MWPC, -0.99% fell about 1% to 236.05.
Originally Published on MarketWatch
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