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Investing.com — U.S. stocks finally succumbed to investor worries about a second wave of coronavirus cases after managing to shrug off concerns earlier in the week.
The Dow Jones Industrial Average sank more than 700 points on Wednesday, and tech giants could not maintain their record-setting pace.
Businesses across the U.S. are trying to reopen even though new hotspots continue to pop up. That has led to worries that the progress will be interrupted by a fresh round of Covid-19 shutdowns. Already, Apple (NASDAQ:AAPL) has been forced to reclose some of its retail stores, announcing the shuttering of seven stores in the Houston area beginning Thursday.
Restaurant groups, retailers, and travel and leisure stocks could feel more pain if new shutdowns are ordered. And the oil sector, which has staged a comeback from a sharp drop in demand in March and April, is feeling pressure because of the slow pace of recovery.
Here are three things that could affect markets tomorrow.
1. Earnings Reports Show Uneven Effect of Covid-19 Shutdowns
Darden Restaurants Inc (NYSE:DRI), which owns the Olive Garden and Longhorn Steakhouse chains, is scheduled to report fiscal fourth quarter earnings Thursday before the opening bell. It’s already a bleak outlook, with analysts tracked by Investing.com looking for a loss of $1.71 a share on revenue of $1.2 billion.
Meanwhile, sports apparel maker Nike Inc (NYSE:NKE) is set to report fourth quarter earnings after the closing bell, and analysts are expecting earnings of 12 cents a share on revenue of $7.4 billion.
2. Oil Sector in Spotlight After Mixed Data
Crude Oil WTI Futuresfell more nearly 6% on Wednesday after the government said crude stockpiles rose more than expected. At the same time, production also showed a surprising gain, indicating shale producers are back at work with West Texas Intermediate, the U.S. benchmark, trading around $38 a barrel.
Energy has been the worst performing sector of the S&P 500 this year despite staging a comeback since March and April, when demand for oil and oil products plummeted because of Covid-19 business shutdowns. Oil’s sell-off on Wednesday also pressured shares of big oil companies such as Exxon Mobil Corp (NYSE:XOM) and Royal Dutch Shell (LON:RDSa) B PLC (NYSE:RDSb).
3. Investors Watch for the Trend in Jobless Claims
Also on Thursday, the government will report its weekly unemployment numbers. The progress has been good, but unemployment is still at post World War II highs. Initial jobless claims for the week ending June 21 are expected to be 1.3 million, while continuing jobless claims are expected to be 19.9 million. Both would be down from the number of claims filed the prior week.
