Dow futures drop 200, jobless claims rise, travel stocks sink

The New York Stock Exchange (NYSE) is located in Lower Manhattan on May 18, 2020 in New York City. Markets increased today as promising details of a possible COVID-19 vaccine were released and more European countries were gradually reopened after months of closure.

Spencer Platt | fake pictures

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9:03 am: KB Home CEO cites unemployment on earnings call as company reports 57% drop in net orders

KB Home CEO Jeffrey Mezger cited the country’s high unemployment when Covid-19 seized on the contribution to the company’s slowdown and order cancellation. “These people who canceled, where they lost their job, have to get their work back to come back and buy from us again,” he said. Overall, the company reported a 57% year-over-year drop in net orders. Mezger added that cities such as Las Vegas and Orlando were particularly affected due to their dependence on travel and tourism. “They are the people where their income decreased because they are no longer working overtime or their scope of work changed or they no longer receive tip income if they are working in a Las Vegas casino because they were closed. And so their income decreased,” he said. Following the call, CNBC’s Jim Cramer said the comments were a “slap in the face of what’s really happening” in some areas of the country. The homebuilder’s shares fell more than 14% in premarket trading. –Stevens

8:43 am: Initial jobless claims disappoint by 1.48 million, but total claims improve

The Labor Department’s unemployment report was worse than expected as 1.48 million Americans applied for state unemployment benefits during the week ending June 20, marking the fourteenth consecutive week that applications stayed above 1 million. Economists surveyed by Dow Jones expected first-time requests to total 1.35 million. Although the weekly number disappointed, a bright spot was that the total number of recipients continued to decline. Total recipients of unemployment benefits, or continuing claims, fell from 767,000 to 19.52 million. – Franck, Cox

8:24 am: Biden leads with voters, but Trump advances in economy, according to a CNBC poll

The CNBC All-America Economic Survey shows Vice President Joe Biden with a nine-point lead over President Donald Trump, but the incumbent still scores better on his economic policies. Voters gave Trump a six-point lead when asked about employment policies and the economy, but that was the only category the Republican led. Biden’s best category was racial equality, where he led by 25%. –Libra

8:22 am: Virgin Galactic stock before the second glide flight test

Shares of Virgin Galactic rose as much as 2% in premarket trading after the space tourism company announced it planned to conduct the second glide flight test of its spacecraft in New Mexico. The company said that since the flight is scheduled during market hours, it will not provide updates on social media during the flight, but will send an update on the flight results after the market closes. The glide flight tests are a precursor to its launch of rocket-powered flights, which Virgin Galactic has previously completed at its test facility in California. –Sheetz

8:20 am: Travel stocks sink into pre-trade

The actions of airlines and cruise lines struggled before the opening bell. United Airlines fell 5.8%, while American and Delta fell more than 4%. Meanwhile, Norwegian Cruise Line fell 7.3%, while Royal Caribbean and Carnival lost 6.2% and 6.7%, respectively. The acceleration of coronavirus cases in some states, and the quarantine for some ordained travelers in the northeastern states, clouded prospects for the recovery of the travel industry. –Libra

8:18 am: KB Home falls 14% after earnings

KB Home shares fell more than 14% in premarket trading after the company reported second-quarter results. The home builder beat earnings estimates, but revenue declined and the company said sales fell 11% year-over-year. Deliveries fell 10% and net orders fell 57% when Covid-19 went into business. “Prolonged public health orders to stay home, the resulting economic shutdown, and our conservative approach to navigating the uncertain environment significantly impacted our orders during the quarter. However, after a low point in April, we are very encouraged by resilience of housing market demand, “said Jeffrey Mezger, KB Home president and CEO. –Stevens

8:16 am: Unemployment report looming amid market concerns, 1.35 million initial claims expected

The Labor Department will release its weekly unemployment report at 8:30 am ET in what is expected to be the fourteenth consecutive week with initial claims totaling more than 1 million. Economists surveyed by Dow Jones anticipate another 1.35 million first-time claims from American workers during the seven-day period ended June 20. Although a reading of 1.35 million would mark a slowdown from the 1.5 million the previous week, the figure is still well above any impression seen during the pre-Covid era.
The unemployment report will also come amid a surge in coronavirus infections in Florida, Texas, California and Arizona, a development that has scared investors in recent sessions and raised fears of an even longer economic shutdown. – Franck

8:14 am: more than 45,000 confirmed virus cases

The United States saw its biggest one-day increase in coronavirus cases on Wednesday, with more than 45,000 confirmed infections, according to NBC News. That breaks the previous record set in April at over 9,000. The increase comes as states gradually reopen their economies and ease restrictions on social distancing. States like California, Texas and Florida have recently reported record numbers of infection. In Arizona, only 12% of beds in the intensive care unit are available. New York, New Jersey, and Connecticut have issued quarantine orders for visitors coming from certain critical states.

8:13 am: Dow futures drop more than 200 points after big sell-off on Wednesday