Stocks rallied to their best weekly gain in more than four decades on Thursday after the Federal Reserve unexpectedly unleashed a new multi-trillion-dollar stimulus plan to support businesses during the coronavirus pandemic.
The S&P 500’s 1.5% rise Thursday brought its weekly gains to 12.1%, or its best one-week gain since 1974, as the Financials and Real Estate sectors outperformed. U.S. equity markets will be closed Friday in observance of Good Friday.
The Nasdaq posted a 10.6% weekly gain for its best since 2008. The Dow’s 2,666.84-point gain since last Friday marked its best weekly rise in point terms ever, and its 12.7% weekly advance was its best on a percentage basis in two weeks.
Investors also eyed the Department of Labor’s initial jobless claims report, which showed a greater than expected 6.606 million new individuals filed for unemployment insurance last week.
Market participants have weighed recent coronavirus outbreak developments with a more positive tilt as of late. Growth in new cases has slowed or even turned negative in global epicenters, with New York state reporting a recent decline in hospitalization numbers even as new deaths – a lagging indicator – increased by the largest single-day amount on Thursday at 799.
Earlier, New York City Major Bill de Blasio said Thursday that social distancing restrictions may even need to be tightened further to rein in any potential for a resurgence in cases.
Beyond signs of a potential easing in new coronavirus cases, policymakers’ readiness to inject further stimulus to support the virus-stricken economy has also helped buoy risk assets. The Federal Reserve unveiled a plan to inject some $2.3 trillion in additional funds for households and local governments Thursday morning.
In Congress, Senate Majority Leader Mitch McConnell has been pushing to deliver an additional $250 billion worth of small business aid to the funds previously allocated in Congress’s $2.2 trillion pandemic relief package, which would bring the total amount available to $600 billion. However, the Senate closed out the week without passing the package, with Senate Democrats seeking additional funds for hospitals and states.
4:09 p.m. ET: Stocks close higher after Fed’s new stimulus
Here’s where equities settled by the end of regular trading
S&P 500 (^GSPC): +39.84 points (+1.45%) to 2,789.82
Dow (^DJI): +285.8 points (+1.22%) to 23,719.37
Nasdaq (^IXIC): +62.67 points (+0.77%) to 8,153.58
2:36 p.m. ET: Crude oil gives back gains, settles lower as OPEC+ supply cut plan will reportedly be shallower than some had hoped
Crude oil prices wiped out earlier gains and settled lower on Thursday following reports of OPEC+’s supply cut proposal, which many market participants viewed as not enough to ease a supply glut and demand shock due to the COVID-19 outbreak.
According to a Bloomberg report citing unnamed OPEC delegates, the oil producing bloc will cut 10 million barrels of oil output a day for two months, with Saudi Arabia and Russia will each bringing down output to about 8.5 million barrels per day, and other members also agreed to cut supply by more than 20%. Some analysts, however, have estimated the demand destruction at several times larger than this margin of production cut.
West Texas intermediate crude oil futures dropped 9.3% to settle at $22.76 per barrel, after earlier having been up by double-digit percentages. The declines brought WTI crude oil’s weekly losses to more than 17%, reversing some of the prior week’s gains.
11:13 a.m. ET: Stocks hold higher after Fed stimulus
Utilities and Real Estate led advances in the S&P 500. In the Dow, advances were led by JPMorgan Chase, up 7.5%, and materials company Dow Inc.
Here were the main moves in markets, as of 11:13 a.m. ET:
S&P 500 (^GSPC): +35.74 (+1.3%) to 2,785.72
Dow (^DJI): +305.7 (+1.3%) to 23,739.27
Nasdaq (^IXIC): +19.09 (+0.24%) to 8,108.17
Crude (CL=F): +$2.26 (+9.01%) to $27.35 a barrel
Gold (GC=F): +$39.20 (+2.33%) to $1,723.50 per ounce
10-year Treasury (^TNX): -0.1 bps to yield 0.744%
10:38 a.m. ET: Oil prices jump after reports Saudi Arabia, Russia pacing toward agreement for output cuts
U.S. and Brent crude oil prices rose Thursday morning after Reuters reported Saudi Arabia and Russia were in the process of reaching an agreement to deepen oil production cuts, and that these reductions could be as high as 20 million barrels per day.
West Texas intermediate rose 8.8% to $27.29 per barrel as of 10:29 a.m. ET, while Brent crude rose 6.7% to $35.03 per barrel.
OPEC and allied nations conducted a virtual meeting Thursday to discuss the direction of oil production after a slump in energy prices this year.
10:15 a.m. ET: BMO: We don’t care about the recovery’s shape, and you shouldn’t either
On Thursday, BMO Capital Markets’ Brian Belski explained why the debate over a rapid (ie ‘V-shaped’) or elongated (‘U-shaped) recovery from the coronavirus crisis is less important than the real-time data. “People are way too entralled with [the recovery’s shape]...instead look at what’s happening on the company level. Stop trying to figure out if its an ‘L’ or a ‘V’, and let companies get back to business.”
10:00 a.m. ET: Consumer sentiment falls the most on record in April amid outbreak, according to U. Michigan survey
The University of Michigan’s closely watched consumer sentiment index dropped by the most on record in April as the coronavirus pandemic and related business closures weighed on participants.
The headline index fell 18.1 points to 71.0 in April, according to the survey. Beneath the headline index, the subindex tracking consumers’ assessments of current conditions sank by 31.3 points, or almost twice the previous record from October 2008.
The subindex tracking consumer expectations, however, fell by 9.7 points, or less than the prior record from December 1980, which the institution attributed to consumers’ hopes that infection and death rates from COVID-19 will soon peak and allow businesses to reopen.
But these expectations could be misplaced, and lead to a deeper plunge in sentiment down the line, said Richard Curtin, Surveys of Consumers chief economist.
“Consumers need to be prepared for a longer and deeper recession rather than the now discredited message that pent-up demand will spark a quick, robust, and sustained economic recovery,” he said. “Sharp additional declines may occur when consumers adjust their views to a slower expected pace of the economic recovery.”
9:32 a.m. ET: Stocks open higher after Fed’s new stimulus announcement
Here were the main moves in markets, as of 9:33 a.m. ET:
S&P 500 (^GSPC): +37.22 (+1.35%) to 2,787.2
Dow (^DJI): +352.18 (+1.5%) to 23,785.75
Nasdaq (^IXIC): +64.18 (+0.8%) to 8,155.69
Crude (CL=F): +$1.18 (+4.7%) to $26.27 a barrel
Gold (GC=F): +$47.30 (+2.81%) to $1,731.60 per ounce
10-year Treasury (^TNX): -0.4 bps to yield 0.76%
9:12 a.m. ET: General Electric expects first-quarter results to be ‘materially below’ prior guidance due to coronavirus
General Electric said Thursday it expects its first-quarter adjusted earnings per share to come in “materially below prior guidance of about $0.10” and that closely watched industrial free cash flow will be near the prior guidance of negative $2 billion.
The company also withdrew its full-year guidance, noting that “given the evolving nature of the COVID-19 pandemic, at this time, GE cannot forecast with reasonable accuracy the full duration, magnitude, and pace of recovery across our end markets, operations, and supply chains,” it said in a statement.
9:08 a.m. ET: With junk bond move, ‘The Fed is all now in’
The Fed’s latest emergency measures to backstop the economy includes a plan to buy junk bonds — a big and controversial move that market analysts have debated for weeks. Bearing in mind that high-yield issuers were seen as the most vulnerable corporate entities to a coronavirus wash out, veteran analyst Peter Boockvar says the move is huge, indeed:
Outside of buying stocks, the Fed is now all in. It's no surprise that gold is up $42 in response.
8:31 a.m. ET: Federal Reserve unveils $2.3 trillion plan to further boost the economy
The Federal Reserve on Thursday unleashed a new series of measures that would inject some $2.3 trillion in additional aid into the virus-stricken economy, focused especially on helping Main Street businesses. These new steps will include programs for helping small- and mid-sized businesses as well as local governments, and will augment aid provided by the Small Business Administration's Paycheck Protection Program, the Fed said Thursday.
"Our country's highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus," Fed Chair Jerome Powell said in a statement. "The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible."
Stock futures pared earlier losses after the announcement.
8:30 a.m. ET: Initial jobless claims total 6.606 million for the week ended April 4
New unemployment claims totaled 6.606 million for the week ended April 4, the Department of Labor said in its report Thursday morning.
The figure was above consensus expectations, according to Bloomberg compiled data, with the median economist anticipating 5.5 million new jobless claims for the week.
The prior week’s new jobless claims were upwardly revised to 6.867 million, topping what had already been a record 6.648 million claims previously reported for the week ended March 28.
Continuing unemployment claims, which are reported on a one-week lag, totaled 7.455 million for the week ended March 28. Consensus economists had expected these to be higher at 8.236 million.
For the prior week, continuing unemployment claims were upwardly revised to 3.059 million from the 3.029 million previously reported.
7:07 a.m. ET Thursday: Stock futures hold lower ahead of weekly jobless claims
Stock futures fell Thursday morning as investors awaited the Labor Department’s weekly initial unemployment claims report, which is expected to show more than 5 million individuals filed for unemployment insurance for the first time last week. Crude oil prices rose and Treasury yields were lower across the curve.
Here were the main moves in markets, as of 7:07 a.m. ET:
S&P 500 futures (ES=F): down 12.25 points, or 0.45% to 2,722.75
Dow futures (YM=F): down 40 points, or 0.17% to 23,206.00
Nasdaq futures (NQ=F): down 33 points, or 0.4% to 8,156.75
Crude (CL=F): +$1.76 (+7.01%) to $26.85 a barrel
Gold (GC=F): +$21.30 (+1.26%) to $1,705.60 per ounce
10-year Treasury (^TNX): -2.9 bps to yield 0.735%
6:03 p.m. ET Wednesday: Stock futures edge lower
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:03 p.m. ET on Wednesday
S&P 500 futures (ES=F): down 5 points, or 0.18% to 2,730.00
Dow futures (YM=F): down 6 points, or 0.03% to 23,240.00
Nasdaq futures (NQ=F): down 24.75 points, or 0.3% to 8,165.00