US stocks traded lower on Thursday, chased by economic reports that showed the sharpest decline in GDP recorded in the second quarter and a weekly report of jobless claims suggesting that the rebound of the pandemic is losing steam. amid a further increase in COVID-19 cases.
Lack of progress in talks between Democrats in Congress, Republicans and the White House over a new coronavirus aid package also weighed on sentiment. The futures of the stock index also fell a little before the bell after President Donald Trump, in a tweet, reflected on the idea of delaying the November presidential elections.
What are the main indexes doing?
The Dow Jones Industrial Average DJIA,
It was trading down approximately 486 points or 1.8%, close to 26,053 while the S&P 500 SPX,
she lost about 48 points, 1.5%, to trade about 3,211. The Nasdaq COMP Composite Index,
It fell 112 points, 1.1%, trading at approximately 10,431.
At current trading levels, the Dow is on track to close below its 50-day moving average for the first time since April 24, according to Dow Jones Market Data. If you close at 26039.97 or less, you will reach that level.
On Wednesday, the Dow rose 160.29 points, or 0.6%, to close at 26,539.57, while the S&P advanced 40 points, or 1.2%, ending at 3,258.44. The Nasdaq Composite jumped 140.85 points, or 1.4%, to finish at 10,542.94.
What is driving the market?
A first reading of the United States’ gross domestic product data for the second quarter confirmed that the pandemic hit the economy. GDP fell at an annualized rate of 32.9%, the Commerce Department said, slightly better than the 34.6% annual decline forecast in a MarketWatch survey, but still the worst on record.
Separately, first-time claims for unemployment benefits increased slightly last week, to 1.43 million from the revised 1.42 million upward, while continuing claims also increased to 17 million in the week ending July 18. .
“This is truly a day that will live in infamy,” said Kent Engelke, chief economic strategist and managing director of Capitol Securities, based in Glen Allen, Virginia. The economic data was not as bad as feared, Engelke said in an interview just before the opening bell, but four of the five largest companies on the market reported earnings after the closing, an event that could be “crucial”, added. .
“We have this incredible wall of concern,” said Engelke. “The Fed told us yesterday that we will maintain zero interest rates forever and ever. But how is this going to affect us in the future? Gold and the dollar tell us something. How about November? The choice is going to get uglier and uglier. How is this going to weigh on the feeling? I could see the wall of concern rising to a gigantic cliff.
There were no signs of progress toward a spending package as lawmakers face a self-imposed deadline on Friday to reach an agreement. It is then that the supplementary unemployment benefits expire, which have been credited with the help to cushion the hit of the pandemic.
The shares extended gains on Wednesday after the Fed left interest rates unchanged as expected, indicating it planned to keep rates close to zero and continue to support the economy, and do more if necessary. Fed President Jerome Powell warned that the resurgence of coronavirus cases in many US states may be holding back economic growth and said the path of recovery depends on the path of the virus.
It’s the busiest week of the corporate earnings reporting season, with results from dozens of high-profile companies to be received after Thursday’s bell, including the Google parent. Alphabet Inc.
GOOG,
GOOGL,
Apple Inc.
AAPL
Facebook Inc.
FULL BOARD,
and Amazon.com Inc.
AMZN
The chief executives of those four companies were questioned for hours on Wednesday in a virtual hearing before the antitrust subcommittee of the House Judiciary Committee.
Read:CEO of Amazon, Apple, Facebook and Google questioned by members of the House in a historic antitrust hearing
Which companies are in focus?
- Procter & Gamble Co.
PG,
+ 2.29%
Shares rose nearly 2% after the consumer products company generated fourth-quarter tax revenue and profit that exceeded expectations and provided an optimistic outlook, fueled by increased demand for personal care and personal health products in middle of the COVID-19 pandemic. - Actions of United Parcel Service Inc. UPS,
+ 17.34%
increased 13%, after the parcel delivery giant reported second-quarter earnings and revenues that easily beat expectations, fueled by an increase in residential demand and healthcare shipments that stemmed from the COVID pandemic- 19. - ConocoPhillips COP,
-5.55%
reported a quarterly loss that was wider than Wall Street had expected. Orders to stay home and falling oil prices strongly pushed profits, management said. Shares were more than 9% lower mid-morning. - Keurig Dr. Pepper Inc. KDP,
-3.74%
reported adjusted earnings that exceeded analyst expectations as consumers increasingly used their K-cup coffeemakers at home during the pandemic. Shares fell 2.3%. - Yum Brands Inc. YUM,
-3.28%
The shares fell 2.8% after Taco Bell’s parent company KFC and Pizza Hut reported earnings that were not as bad as analysts had anticipated. - Eli Lilly Shares
LLY
-6.09%
They fell more than 4% after the drug maker beat earnings expectations and raised its full-year forecast, while revenue fell short of expectations. - Northrop Grumman NOC,
+ 4.18%
Actions of It jumped 4% after the defense contractor delivered larger-than-expected earnings and sales for the second quarter and increased its guidance for the full year. - DuPont share DD,
-2.42%
They fell more 4.8% after the chemical company reported a higher-than-expected loss. - Dunkin ‘Brands DNKN,
-4.96%
reported adjusted second-quarter earnings that fell below expectations, but earnings that fell less than anticipated and announced the reinstatement of its dividend program.
What are other markets doing?
In Asia, China’s CSI 300 index 000300,
fell 0.5%, the SHCOMP compound of Shanghai,
decreased 0.2%, the Hong Kong Hang Seng HSI Index,
lost 0.7% and Nikkei 225 NIK from Japan,
yielded 0.3%.
European stock markets expanded their losses, with the Stoxx 600 Europe SXXP index,
2.5% less and the UK FTSE 100 UKX,
2.9% lower.
GCQ20 Gold Futures,
they fell 0.3% to $ 1,948.00 an ounce, on track to break a nine-session winning streak, while the ICE US Dollar Index DXY,
down 0.1%. CLU20 oil futures,
were lower in terms of demand, with the US benchmark index CLU20,
falling 4% to $ 39.59 a barrel on the New York Mercantile Exchange.
The yield on the 10-year US Treasury bond TMUBMUSD10Y,
It fell 2.6 basis points to 0.55%. Yields move in the opposite direction of prices.
Read below:“The stock market no longer believes the economy needs it if it has the Fed,” says David Rosenberg
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