US stocks fell on Thursday after the data showed no real improvement in weekly unemployment data with coronavirus cases increasing further in many states, though Senate and White House Republicans announced progress toward a deal on another financial aid package for businesses and households affected by the pandemic.
However, investors were encouraged by the gains of companies like Tesla, Microsoft and Twitter, with more results after the market closed on Thursday.
The Dow Jones Industrial Average DJIA,
it traded lower at 107 points, 0.4%, near 26,899, while the S&P 500 SPX index,
It fell 2 points, less than 0.1%, trading near 3,264. The Nasdaq COMP Composite Index,
It was approximately 20 points or 0.2% lower, close to 10,686.
The Russell 2000 RUT,
, which tracks small-cap companies, was 0.9% higher on the day, and up more than 2% so far this week, compared to a weekly gain of 0.9% for the Dow, an increase of 1.5 % for the S&P 500 and 1.8% profit for the Nasdaq. The superior performance of smaller companies suggests some investor fatigue with the highest and most expensive megacap stocks.
On Wednesday, the Dow jumped 165.44 points, or 0.6%, to end at 27,005.84, its highest close since June 9, according to Dow Jones Market Data. The S&P 500 gained 18.72 points, or 0.6%, to close at 3,276.02. The Nasdaq Composite Index added 25.76 points, or 0.2%, ending at 10,706.13.
What is driving the market?
Wall Street opened with modest losses on Thursday, despite a series of narratives that could encourage bullish investors to take more risks.
Senate and White House Republicans agreed on a $ 1 trillion coronavirus relief package, as a weekly supplement of $ 600 to unemployment benefits will expire later this month. The proposal paves the way for new talks between Senate Republicans and Democrats, who have rallied around a $ 3.5 billion bill that passed the House in May, but analysts believe the negotiations will remain tense. .
Investors, meanwhile, analyzed a Labor Department weekly claim filing for workplace benefits, showing that 1.42 million Americans applied for benefits for the first time, a 109,000 increase and the first increase since the end of March.
The report has become one of the key measures of the state of the COVID-19 pandemic that has recently re-emerged in many states, forcing the re-imposition of restrictions to reduce the spread of the deadly disease.
Market participants are analyzing a barrage of gains, including a trio of Dow components, including Intel INTC,
, Travelers Cos. TRV,
and Dow Inc. DOW,
Those reports come after electric vehicle maker Tesla produced optimistic results, which reported its fourth straight profit thanks to more than $ 400 million in electric vehicle tax credits, paving the way for the popular company to join the S&P 500. .
Investors have so far ignored mounting tensions between the United States and China, with Beijing pledging to shut down the U.S. consulate in the southwestern city of Chengdu, according to the South China Morning Post. The move comes after the United States ordered the closure of a Chinese consulate in Houston, citing fraud and espionage, highlighting mounting tensions between global superpowers.
In coronavirus news, the United States now has 3.9 million cases and 143,000 deaths, according to data added by Johns Hopkins University.
A “trifecta” of factors (fiscal stimulus, encouraging news about the possibility of a COVID-19 vaccine, and better-than-expected economic news) helped lubricate markets early in the pandemic period, said Michael Stritch, chief investment officer at BMO. Wealth Management.
But more recently, Stritch said in an interview, “the virus has reaffirmed itself.” Our opinion was always that we would have a wavy type of recovery. And yes, we need more on the tax side now. From a market perspective, it is a push where bad economic data can light a fire under Congress to act faster. ”
Like many other observers, Stritch believes that the markets are likely to remain “aggressively flat” for the foreseeable future, until there is more clarity on the treatment.
A report on the main US economic indicators, released at 10 a.m. EST, rose in June, but noted that the economy was likely to remain in recessionary territory.
See:The stock market no longer believes the economy needs it if it has the Fed, ‘says David Rosenberg
What actions are in focus?
- Actions of Southwest Airlines Co.
LUV
+ 0.15%
It fell 1.4%, reducing previous losses, after the airline reported a large loss that was narrower than expected, as the drop in passenger demand was not as bad as feared. - Hershey Co. HSY
+ 4.60%
He said Thursday that he had net income of $ 268.9 million, or $ 1.29 per share, in the second quarter, down from $ 313.3 million, or $ 1.48 per share, in the same period last year. The shares rose more than 4%. - Actions of Dow Inc. Dow
-3.54%
They fell more than 4% in early operations on Thursday, after the materials science company suffered a slightly larger loss than expected but reported revenue that fell less than expected. - Actions of Quest Diagnostics Inc.
DGX,
-1.44%
declined 0.4%, although the diagnostic testing provider reported a second-quarter profit that fell less than expected as the rapid expansion of COVID-19 testing helped revenue exceed expectations, but provided a online perspective. - Actions of Travelers Companies Inc. TRV
-2.34%
Shares fell 3.3% on Thursday, after the insurer shifted to a higher-than-expected second-quarter loss, but net written premiums exceeded expectations. - American Airlines Group Inc. AAL
+ 3.96%
recorded a large loss for the second quarter, as the trips were decimated by the coronavirus pandemic. The shares rose nearly 3%, reversing initial losses. - Kleenex Parent Actions Kimberly-Clark Corp.
KMB,
+ 2.48%
It jumped after the company reported earnings that exceeded analyst expectations. - Microsoft Corp. MSFT
-2.78%
A record year ended Wednesday by announcing record quarterly earnings, but shares fell 2%. - Actions of Twitter Inc. TWTR,
+ 8.31%
They jumped more than 5% in Thursday morning operations after the company failed to meet revenue expectations, but saw a large increase in user growth.
How do other markets operate?
In Europe, the Stoxx 600 Europe SXXP index,
rose fractionally, while the UK FTSE UKX,
0.1% higher powered.
GCQ20 Gold Futures,
It rose 1.3% to $ 1,889.80 an ounce on the New York Mercantile Exchange Thursday, on its way to a new record. September futures for the US benchmark crude oil index CLU20,
They fell 0.4% to $ 41.72 a barrel on concerns about rising inventories.
The 10-year Treasury note yields TMUBMUSD10Y,
It fell about two basis points to 0.581% after the unemployment claims report was released. Yields move in the opposite direction of prices.
In the currency markets, the dollar fell 0.1% against its six main rivals, according to the DXY index of the US dollar ICE,
.
In Asia, the Nikkei NIK,
closed 0.6% lower at 22,751.61, while China’s CSI 300 meter 000300,
it remained practically unchanged at 4,712.44. Hong Kong HSI Hang Seng Index,
It increased 0.8% to close at 25,263.
Read:Cyclical rotation is here, say Jefferies analysts. For real this time.
.
