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Stock-index futures pointed to a slightly higher start on Wall Street Thursday, despite a record number of weekly new jobless claims, a day after equities fell sharply to begin the second quarter as investors braced for an onslaught of bad news on the public health front and the economy as a result of the global COVID-19 pandemic.
Crude oil rose sharply after President Donald Trump said he expected Saudi Arabia and Russia to reach a truce in their price war was seen lending support to equities and after reports of Chinese buying for the country’s reserves, analysts said.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, +0.41% were up 202 points, or 1.0%, at 20,942, while S&P 500 futures ES00, +0.53% rose 1.0% to 2,472. Nasdaq-100 futures NQ00, +0.30% were up 1.0% at 7,509. Futures pared their gains after an ugly jobs report released at 8:30 a.m. Easter.
The Dow DJIA, -4.44% on Wednesday fell 973.65 points, or 4.4%, to finish at 20,943.51. The S&P 500 SPX, -4.41% slipped 114.09 points, or 4.4%, to 2,470.50. The Nasdaq Composite COMP, -4.41% shed 339.52 points, or 4.41%, to 7,360.58. The small-capitalization Russell 2000 index RUT, -7.03%, saw even more severe losses, finishing the session off 81.11 points, or 7%, to end at 1,071.99.
What’s driving the market?
The U.S. Labor Department on Thursday reported that 6.65 million Americans filed for first-time jobless benefits, doubling the previous week’s record rise of 3.28 million the previous week. Previously, the record first-time claims number was below 700,000.
In a separate report, the government also said that the U.S. trade deficit narrowed to $39.9 billion in February from $45.5 billion in January.
Countless businesses across the country have been forced to close or scale back hours, throwing masses of people out of work and triggering an unprecedented back-to-back surge in initial jobless claims.
In just the past two weeks alone, new claims have easily exceeded the peak number of people who collected benefits during the 2007-2009 recession. A then-record 6.6 million people drew benefits at the tail end of the last recession.
However, investors also took some comfort from a rise in crude oil prices overnight.
“The big story of the day was a sharp rebound in the oil price,” said Russ Mould, investment director at AJ Bell, in a note. “Brent crude jumped by nearly 10% …after Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war. Vladimir Putin also called for global oil producers and consumers to find a solution to ‘challenging’ oil markets,” said Russ Mould, investment director at AJ Bell, in a note.
The worldwide price war pushed crude oil to lose nearly two-thirds of its value in the first quarter, and has slammed the energy sector. The U.S. benchmark CL.1, +8.96% slumped to an 18-year low and dipped intraday below $20 a barrel. Shares of ExxonMobil Corp. XOM, -1.16% and Chevron Corp. CVX, -5.38% were both up nearly 6% in premarket action but remain more than 40% lower for the year to date.
Wednesday’s stock slump was attributed to investors bracing for weeks of grim news as the coronavirus tally continues to rise in the U.S. Economic data is also expected to grow more dire, reflecting the lockdown on activity across the country. Trump late Tuesday had warned that the U.S. faced a “very, very painful” two weeks while the White House projected between 100,000 to 240,000 U.S. deaths.
What are other markets doing?
Government bond yields fell again, with the benchmark U.S. 10-year Treasury note TMUBMUSD10Y, +2.63% down 4 basis points to 0.59%.
Oil prices perked up, with the price of a barrel of West Texas Intermediate Crude CLK20, +8.96% for May delivery rising 10.6% to $22.48 a barrel on the New York Mercantile Exchange.
Gold for June delivery GCM20, +1.75% jumped about 2% to $1,623.10 an ounce.
The dollar DXY, +0.18% traded 1% higher compared to a basket of currency trading partners, according to the ICE U.S. Dollar index.
Which companies are in focus?
Walgreens Boots Alliance Inc. WBA, -5.95% on Thursday reported quarterly results that beat expectations but said it would hold off on issuing full-year guidance. Shares were lower in pre-market trading.
U.S. Bancorp USB, -7.31% shares ticked up in pre-market trade despite a price target cut from Deutsche Bank.
CarMax Inc. KMX, -2.73% shares surged nearly 5% in early action as the company said it had beat expectations in the quarter, before the coronavirus hit in March.
Related: American businesses are tapping their credit lines at the fastest pace ever
