US stocks gain despite latest grim economic news

JThe Dow Jones Industrial Average and other major indexes advanced, recouping some lost ground as world leaders take tentative steps to reopen economies hammered by the coronavirus.

Investors weighed in on the latest batch of corporate earnings and economic data showing once again how the coronavirus and associated shutdowns are undermining U.S. economic activity.

US stocks oscillated between positive and negative territory on Thursday before closing generally higher. Investors weighed in on the latest batch of corporate earnings and economic data showing once again how the coronavirus and associated shutdowns are undermining U.S. economic activity.

More than five million people have filed initial claims for unemployment benefits in the past week. Separate data on the US housing industry showed a major slowdown in all regions of the country.

The Dow Jones Industrial Average closed up 33 points, or just over 0.1%, while the S&P 500 added 0.6% and the Nasdaq Composite rose 1.7%. Healthcare, technology and consumer discretionary stocks were the day’s winners, while energy and financials stocks fell.

Incoming economic data could hardly be worse, but investors were expecting another high number of jobless claims. In the week ended April 11, 5.3 million Americans filed initial claims for unemployment insurance, bringing the total number of newly unemployed over the past month to more than 22 million, according to the Department of Labor. Work. The latest figure compares with the 5.5 million economists were expecting and the record 6.6 million set the previous week.

The Labor Department also said the seasonally adjusted advanced insured unemployment rate for the week ending April 4 rose to 8.2% from 5.1% the previous week. In the housing market, builders began building 22% fewer homes in March than in February, according to the Census Bureau.

Stock indices were also mixed overseas: Japan’s Nikkei 225 closed down 1.3% and China’s Shanghai Composite rose 0.3%. The Stoxx Europe 600 index rebounded slightly from its biggest one-day loss in nearly three weeks on Wednesday, rising 0.6% on Thursday. The German DAX rose 0.2%, the French CAC 40 fell 0.1% and the British FTSE 100 index gained 0.6%.

Several leaders in Europe, who were affected by the coronavirus earlier than the United States, revealed additional interim measures to reopen their economies. German Chancellor Angela Merkel said small shops will reopen on Monday and some schools will restart in May.

“We see three lessons from their experiences,” Goldman Sachs economists said. “First, initial reopening timelines often turn out to be overly optimistic. Second, even countries at the forefront of reopening have progressive and conservative plans. Third, recovery is easier and faster in manufacturing and construction than in consumer services.

President Donald Trump is due to announce guidelines on Thursday to begin the process of reopening the country.

“Plans to reopen the country are about to be finalized, and we will be sharing details and new guidelines with everyone soon,” he said at a Wednesday White House press conference. . “I will speak to all 50 governors very shortly. And I will then authorize each individual governor, of each individual state, to implement a reopening and a very powerful reopening plan for their state at the most appropriate time and in the manner.

Haven assets mostly gained ground on Thursday. The yield on the 10-year US Treasury fell 3 basis points, or hundredths of a percentage point, to 0.609% as the price of the securities rose. The US dollar index (DXY), which measures the greenback against a basket of other currencies, gained 0.6%. And the price of gold spent most of the day in the green before plunging into the red in the late afternoon. It closed down 0.7% at $1,715 an ounce, after rising 1.6% on Thursday.

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Stocks in the energy and transportation sectors continued to fall.

Benchmark crude oil prices fell 0.5% to $19.77 a barrel, and stocks of oil companies remained under pressure. Shares of Occidental Petroleum (OXY) fell 10.4%, adding to a 67% drop since the start of the year, and shares of Exxon Mobil (XOM) closed down 3.3 %. The sector has been battered by falling demand and a market share war between major oil-producing countries.

Airline stocks have also suffered this year as air travel around the world has all but come to a standstill. On Thursday, investors continued to digest government aid projects for the industry. Shares of United Airlines Holdings (UAL) fell 11.5% and shares of American Airlines Group (AAL) lost 9.9%. Both more than undid gains made on Wednesday.

Other stocks were moving in response to their companies’ quarterly earnings reports, rather than rushing higher or lower in response to changing sentiment, a sign of a tentative return to normalcy in markets. financial.

Shares of Bed Bath & Beyond (BBBY) soared 18% after easily beating Wall Street earnings estimates on Thursday morning. The company reported earnings per share of 38 cents in the fiscal fourth quarter, compared to the 26 cents expected by analysts. Same-store sales fell 5.6% in the fourth quarter, a smaller decline than Wall Street expected. The stock fell 17.3% on Wednesday, leaving it down 74% year-to-date as of the close of trading.

The giant investor BlackRock (BLK) announced earnings per share of $6.60 on Thursday morning. The Street expected earnings of around $6.40 per share. Despite market turmoil, the company raised $35 billion in new money during the quarter. Shares rose 3.5% in Thursday trading.

Morgan Stanley (MS) stock rebounded from a larger loss to close down just 0.1%. Its earnings report on Thursday morning echoed the gloomy sentiment expressed by several other banks over the past few days. The company’s CEO, who recently recovered from Covid-19, said he expects the virus to “negatively affect” Morgan Stanley and compared the environment to that seen during the financial crisis. Like other banks, Morgan Stanley has set aside funds to cover expected loan losses, cutting its profits.

Finally, Abbott Laboratories (ABT) stock jumped 5.7% to a record high after beating first-quarter earnings and sales estimates, but suspended its financial guidance for the rest of the year. Trump announced Abbott’s on-site coronavirus diagnostic kit, which can produce a result in less than 15 minutes.

Write to Steve Goldstein at [email protected] and Al Root at [email protected]

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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