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Stock benchmarks Thursday were aiming for a fourth straight gain as investors braced for the busiest day of the fourth-quarter earnings reporting season and parsed a better-than-expected weekly update on employment amid the COVID-19 pandemic.
How are stock benchmarks performing?
- The Dow Jones Industrial Average DJIA, +0.81% rose 90 points, or 0.3% at around 30,808.
- The S&P 500 index SPX, +0.56% added 11 points, or 0.3%, to 3,841.
- The Nasdaq Composite Index COMP, +0.38% added 45 points, or 0.3%, at about 13,657, enough to put the technology-laden index in record-closing territory above its 13,635.99 all-time closing peak put in on Jan. 25.
On Wednesday, the S&P 500 and the Dowbooked their third straight gains but the Nasdaq Composite closed lower.
What’s driving the market?
Market participants appear heartened by jobless benefit claims falling for a third straight week to the lowest number of claims since November, but a reading that remains elevated.
U.S. initial jobless claims fell by 33,000 to 779,000 at end of January, compared with economists’ consensus estimates for 835,000 from 847,000 the week before, according to economists surveyed by Econoday.
Although new coronavirus cases have been retreating in a number of U.S. states, market participants still worry that the pandemic may hinder a more rapid improvement of the jobs market.
The report comes ahead of the closely followed employment situation reading due on Friday from the Labor Department.
Thursday also marks a busy day of earnings and economic reports will be closely watched, as investors look for signs that the economy is rebounding from the COVID-19 pandemic, despite an elevated number cases and the emergence of new variants of the coronavirus amid the rollout of effective vaccines.
In earnings, no fewer than 42 companies are slated to report quarterly results on Thursday, representing the busiest day on the calendar for fourth-quarter results.
Headliners include Ford Motor F, +1.79% and Snapchat parent Snap Inc. SNAP, +0.07%, but include results from the likes of Clorox Co. CLX, -4.20%, Yum Brands YUM, +0.70%, and Merck & Co. MRK, -1.64%, which also announced that Kenneth Frazier, its CEO would be stepping down after 10 years at the helm of the drug company.
See: S&P 500 earnings recession set to end, as Q4 EPS swings to growth
On Wednesday, the U.S. added at least 118,991 new cases on Wednesday, according to a New York Times tracker, and counted at least 3,843 deaths. Case numbers have been declining, however. The U.S. averaged 136,438 new cases a day in the past week, down 30% from the average two weeks ago. Hospitalizations have also been falling, according to the COVID Tracking Project. There were 91,440 COVID-19 patients in U.S. hospitals on Wednesday, down from 92,880 a day earlier and the lowest level since Nov. 27.
Against that backdrop, investors are also awaiting next steps on a new fiscal stimulus package. President Joe Biden said he was open to sending $1,400 payments to a smaller group of Americans in the next round of coronavirus relief legislation and changing the overall price tag of his $1.9 trillion plan, The Wall Street Journal reported.
Also on investors’ radar was a meeting of financial regulators, including Treasury Secretary Janet Yellen, to discuss the market volatility related to GameStop Corp. GME, -9.05% and AMC Entertainment Holdings AMC, -7.13% and other so-called meme stocks.
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In other economic reports, U.S. productivity dropped to a 4.8% annual rate in the fourth quarter. A report on factory orders is due at 10 a.m.
Which stocks are in focus?
- Shares of Merck slipped in premarket trading Thursday, after the drugmaker reported a fourth-quarter profit that missed expectations, but revenue that beat and provided and upbeat full-year outlook.
- Clorox jumped in premarket trade Thursday, after the maker of cleaning products and household goods posted stronger-than-expected earnings for its fiscal second quarter.
- Costco Wholesale Corp. COST were in focus after the retailer on Wednesday reported net sales of $13.64 billion for the retail month of January, up 18% from $11.57 billion in the same month a year ago.
- Shares of Hershey Co. HSY, +0.30% were set to gain Thursday, after the chocolate and confectionary products company reported fourth-quarter profit and sales that rose above expectations, helped by market share gains and volume growth.
- Yum Brands stock rose Thursday in premarket trading after the fast-food company reported fourth-quarter earnings that beat expectations.
- Tapestry Inc.‘s stock TPR, +3.80% rose in premarket trading after the luxury fashion and accessories company reported fiscal second-quarter earnings and sales that beat expectation.
- Bristol-Myers Squibb Co. BMY, -0.13% said Thursday it had a net loss of $10.027 billion, or $4.45 a share, in the fourth quarter, wider than the loss of $1.056 billion, or 55 cents a share, posted in the year-earlier period, weighed down by charges relating to the MyoKardia asset acquisition, the purchase of Celgene, contingent value rights air value adjustments, equity investment gains, intangible assets impairment charges and other acquisition and integration expenses.
- Shares of New York Times Co. NYT were indicated up in premarket trading, after the media and newspaper company reported fourth-quarter adjusted profit and revenue beats, as strength in subscription revenue offset weakness in advertising.
- Quest Diagnostics Inc. DGX said Thursday its board has approved a 10.7% increase in its quarterly dividend to 62 cents a share.
How are other assets faring?
- The yield on the 10-year Treasury note TMUBMUSD10Y rose about 1.7 basis points to 1.146%. Yields and bond prices move in opposite directions.
- The ICE U.S. Dollar Index, DXY, a measure of the currency against a basket of six major rivals, was up 0.2% at 91.383.
- Gold futures GCJ21, -2.54% slumped nearly 2% to below $1,800 an ounce
- Oil futures rose, with the U.S. benchmark CL.1 trading up 0.6% on the New York Mercantile Exchange.
- The Stoxx 600 Europe index SXXP traded 0.3% higher, while London’s FTSE 100 UKX fell 0.1%.
- In Asia, the Shanghai Composite SHCOMP fell 0.4% lower, Hong Kong’s Hang Seng Index HSI fell 0.7% and Japan’s Nikkei 225 NIK fell 1.1%.
