U.S. stocks opened lower, but then pushed higher, after new data on the U.S. labor market underscored rising joblessness amid the coronavirus outbreak. During the overnight session, the European Central Bank announced a massive stimulus plan aimed at helping mitigate economic damage in the region.
The U.S. Department of Labor reported a surge of 70,000 new jobless claims for the week ending March 14, reflecting a much greater than expected number of individuals filing for unemployment insurance. The total number of initial jobless claims came in at 281,000 for the week – the highest level since September 2017.
“The increase in initial claims are clearly attributable to impacts from the COVID-19 virus,” the Department of Labor said in a statement.
While the report already reflected a weakening labor market, other economists believe the worst is still yet to come.
“At this point, we're braced for next week's jobless claims number to spike by several hundred thousand; they could easily breach a million,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note Thursday just before the latest report was released.
Earlier overseas, the European Central Bank launched a so-called Pandemic Emergency Purchase Program (PEPP), comprising 750 billion euros ($818 billion) worth of debt purchases aimed at helping the floundering regional economy amid the coronavirus outbreak. The new measures will bring the ECB’s total planned bond purchases this year to 1.1 trillion euros.
“Extraordinary times require extraordinary action,” ECB President Christine Lagarde said in a statement after the decision. “There are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate.”
Futures were initially down after the regular session Wednesday, during which stocks took a drubbing as traders resorted to more panic selling amid the ongoing pandemic. The Dow dropped 1,338 points, or 6.3%, to settle below the psychologically important level of 20,000 for its lowest close since February 2017. The losses brought the Dow’s total declines since its Feb. 12 closing high to 32.7% – firmly in bear market territory.
The carnage extended across risk assets Wednesday, with U.S. West Texas intermediate crude oil prices closing lower by more than 24% to settle at $20.37 per barrel, the lowest level since early 2002.
The ongoing COVID-19 crisis has pushed governments around the world to consider stimulus measures and impose stiff restrictions on travel and public gatherings to prevent further spreading.
Late Wednesday, the U.S. Senate overwhelmingly passed a bipartisan, multi-billion dollar emergency package that includes expanded unemployment insurance and paid sick leave for hourly workers. President Donald Trump signed the bill into law late Wednesday, as it had already received approval from the House of Representatives.
In the private sector, an increasing number of companies have pressed pause on operations and closed brick and mortar locations in effort to protect their workers and slow the spread of the virus. General Motors, Ford and Fiat Chrysler – the three leading U.S. automakers – announced Wednesday their plans to temporarily halt manufacturing operations at their North American factories after union leaders and employees demanded protection from the pandemic.
The outbreak has also now disrupted operations at institutions including the New York Stock Exchange, which said late Wednesday it will temporarily close its trading floor and move to fully electronic trading starting at market open March 23. The decision – which impacts the NYSE equities trading floor in New York, NYSE American Options trading floor in New York, and NYSE Arca Options trading floor in San Francisco – came after two individuals tested positive for COVID-19 during screenings launched at the exchange this week.
While heightened market volatility and a public health crisis have led to some speculation over whether stock exchanges would remain open, regulators including Securities and Exchange Commission Chairman (SEC) Jay Clayton and Treasury Secretary Steven Mnuchin have thus far indicated their desire to keep financial markets open.
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10:18 a.m. ET: All three major indices turn positive
The S&P 500 and Dow joined the Nasdaq and rose Thursday morning, steadying after Wednesday’s rout. spx
As of 10:18 a.m. ET, the S&P 500 was up 11.19 points, or 0.47%, led by gains in the Big Tech-heavy Communications sector. The Dow rose 32.15 points, or 0.16%, as gains in Dow Inc. and Microsoft pulled the index higher.
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10:12 a.m. ET: Nasdaq turns positive as tech stocks jump
The Nasdaq pushed into positive territory Thursday morning as shares of tech heavyweights including Amazon, Apple, Tesla, Microsoft and Facebook all rose.
The value-weighted index jumped 1.89% as of 10:12 a.m. ET, while the S&P 500 and Dow each held in the red.
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9:55 a.m. ET: Uber shares jump more than 20% after company reassures investors of cash position amid pandemic: reports
Uber (UBER) reportedly said Thursday that it will still have billions of dollars in available cash by year-end, even as the coronavirus outbreak weighs on demand across the transportation industry.
Uber said it expects to have $6 billion in cash on hand along with a $2 billion debt revolver, Bloomberg reported, citing an Uber call with analysts Thursday. In Uber’s “worst case scenario” outlook, it would still have $4 billion in cash reserves along with the revolver, the report added.
Providing just one example of the outbreak’s evolving impact on the business, Uber’s CEO Dara Khosrowshahi reportedly said that Hong Kong saw trips fall 45% as the coronavirus overtook the region, and that the city is now 30% off its peak.
Uber recently joined peer ride-hailing giant Lyft in halting shared rides amid the coronavirus pandemic.
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9:31 a.m. ET: Stocks open lower, extending losses from Wednesday
Stocks extended declines from Wednesday and the overnight session. The losses around market open, however, were much shallower than those seen in recent days.
Here were the main moves in markets, as of 9:32 a.m. ET:
S&P 500 (^GSPC): -16.32 (-0.68%) to 2,381.78
Dow (^DJI): -190.67 (-0.96%) to 19,708.25
Nasdaq (^IXIC): -36.13 (-0.52%) to 6,948.12
Crude (CL=F): +$2.20 (+10.80%) to $22.57 a barrel
Gold (GC=F): +$0.50 (+0.03%) to $1,478.40 per ounce
10-year Treasury (^TNX): -12.6 bps to yield 1.132%
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9:23 a.m. ET: Slack shares rise after company reports adding thousands of new paid customers, amid widespread work from home phenomenon
Slack (WORK) shares rose 5.5% in early trading, far outperforming the broader market, after the workplace messaging company reported adding thousands of new paid customers between February and mid-March.
The company added 7,000 paying customers for the period Feb. 1 to March 18 this year, Slack said in a securities filing Thursday. During the third and fourth quarters of the fiscal year ended Jan. 31, Slack added about 5,000 new paid customers per quarter.
Slack has widely been seen as a beneficiary of the workplace disruptions stemming from companies’ and governments’ responses to COVID-19. Many companies have urged employees to work from home, creating more demand for workplace messaging software.
While shares of Slack were down19.9% for the year to date through Wednesday’s close, they outperformed the S&P 500, which fell nearly 26% for the same period.
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9:10 a.m. ET: Bank of America ‘Q2 will be brutal’
So much for those shallow recession/V-shaped recovery calls. Bank of America is the latest to take a knife to its growth forecasts, predicting a “brutal” -12% drop in economic activity for the coming quarter:
We believe that the US economy has fallen into recession, joining the rest of the world, and it is a deep plunge. We now expect the economy to collapse 12% qoq saar in 2Q following only 0.5% growth in 1Q. Although the decline is severe, we believe it will be fairly short lived. We expect the economy to return to growth in 3Q. For the full year, we forecast a contraction of 0.8%. Jobs will be lost, wealth will be destroyed and confidence depressed. The salvation will come if there is a targeted and aggressive policy response to offset the loss of economic activity and ensure a sound financial system.
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8:30 a.m. ET Thursday: New unemployment claims surged last week to the highest level since Sept. 2017.
Initial jobless claims surged much more than expected last week, reflecting the early impact of the coronavirus on the U.S. labor market.
New unemployment insurance claims jumped to a seasonally adjusted level of 281,000 for the week ended March 14, the U.S. Labor Department said in its weekly report Thursday. Consensus economists had expected claims to rise to 220,000, according to Bloomberg data.
The prior week’s level was left unrevised at 211,000.
“During the week ending March 14, the increase in initial claims are clearly attributable to impacts from the COVID-19 virus,” the Department of Labor said in a statement. “A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not.”
Continuing jobless claims came in at 1.701 million for the week ended March 7. Consensus economists had expected these claims to rise to 1.738 million. The prior week’s continuing claims were revised down to 1.699 million, from 1.722 million previously reported.
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7:16 a.m. ET Thursday: Stock futures erase gains from after ECB announcement heading into Thursday’s session
Here were the main moves in markets as of 7:16 a.m. ET Thursday morning:
S&P 500 futures (ES=F): 2,386.50, -27.50 or -1.14%
Dow futures (YM=F): 19,620.00 -233 or -1.17%
Nasdaq futures (NQ=F): 7,202.75, -2.75 or -0.04%
Crude oil prices (CL=F): $22.67 per barrel, up $2.30 or 11.29%
10-year Treasury note: yielding 1.158%, down 10 basis points
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7:16 p.m. ET Wednesday: Stock futures gain after ECB announces 750 billion euro bond repurchase stimulus plan
Futures reversed course Wednesday evening, with the Dow looking to rise above the 20,000 level, after the European Central Bank announced a 750 billion euro bond repurchase program, according to Reuters.
Here were the main moves in markets, as of 7:19 p.m. ET:
S&P 500 futures (ES=F): 2,433.75, +19.75 or +0.82%
Dow futures (YM=F): 20,157.00, +304.00 or +1.53%
Nasdaq futures (NQ=F): 7,284.75, +59.50 or +0.82%
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6:05 p.m. ET Wednesday: Stock futures fall further after rout
Futures for each of the three major indices were lower as overnight trading kicked off for domestic equities.
Here were the main moves in markets, as of 6:05 p.m. ET:
S&P 500 futures (ES=F): 2,391.25, -22.75 or -0.94%
Dow futures (YM=F): 19,703.00, -150 or -0.76%
Nasdaq futures (NQ=F): 7,145.00, -60.50 or -0.84%
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2020-03-19 14:21:00Z
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