Investors assessed another abysmal weekly jobless claim report that brought the total of Americans filing for unemployment benefits to 22 million since mid-March. Big growth tech stocks built on their momentum once again, with Netflix, Amazon and Microsoft outperforming the broad market. Here's what happened:
- S&P 500 closed up 0.58% for its 2nd positive day in
- This week: S&P is up 0.35% on pace for its 3rd positive week in 4
- Nasdaq closed up 1.66% for its 5th positive day in 6
- This week: Nasdaq is up 4.65% on pace for its 2nd straight positive week and its 3rd positive week in 4
- 6 out of 11 sectors closed higher led by Health Care up 2.2%
- Nasdaq 100 closed up 1.93%, and is now positive for the year
- West Texas Intermediate, the U.S. oil benchmark, was unchanged, matching yesterday's $19.87 per barrel settle, which was the lowest since Feb. 7, 2002
After spending much of the day in the red, the Dow staged a comeback in the final hour of trading and closed 33 points higher for a gain of 0.14%. The S&P 500 rose 0.58%, while the Nasdaq Composite jumped 1.66%, boosted by Netflix and Amazon, both of which hit new all-time highs. — Stevens
With roughly one hour left in the trading session, the Dow was down slightly as investors grappled with dismal economic data and a longer shutdown in New York and other states. The 30-stock average dipped 80 points, or 0.3%. However, the Nasdaq Composite advanced 1.1% as Netflix hit a record high. —Imbert
The Federal Reserve's efforts to support the markets and economy through the coronavirus crisis are beyond anything it has done before, New York Fed President John Williams said Thursday. "Our work is not done," he said during an afternoon webinar with the Economic Club of New York. Over the past month, the Fed has cut its benchmark interest rate to near zero and has instituted a barrage of programs aimed at keeping markets running smoothly and helping get money to businesses and individuals that have been hamstrung by an economic shutdown. Williams said the Fed now has to make sure those moves perform as they are intended. – Cox
Netflix — Shares of the streaming giant rose nearly 5% to an intraday all-time high of $449.52 per share. The stay-at-home stock got a boost when Goldman Sachs hiked its price target to $490 per share, tied for the highest on the Street.
Abbott Laboratories — Abbott shares climbed more than 4% after the biotechnology company reported quarterly results that surpassed analyst expectations. The company also highlighted three diagnostic tests for coronavirus, including molecular tests.
KeyCorp — KeyCorp shares dropped more than 6% after the company posted disappointing earnings and revenue for the previous quarter. The company increased its loan-loss provisions to $359 million from $62 million in the year-earlier period.
BlackRock — Better-than-expected earnings pushed BlackRock shares up more than 6%. The asset-management giant reported a profit of $6.60 per share, topping a Refinitiv estimate.
Check out more companies making the biggest headlines here. — Imbert, Li
New York and other East Coast states are extending their shutdown of nonessential businesses to May 15 as officials grapple with how to reopen parts of the economy without leading to a resurgence in coronavirus cases, Gov. Andrew Cuomo said Thursday. Cuomo announced the news on Twitter, saying "New York on PAUSE" will be extended in coordination with other states. —Higgins-Dunn
Shares of Walmart rose to a new all-time high of $132.15 on Thursday, as the retailer continues to benefit from consumers stalking up on staples. The big-box retailer has gained 15% this year, far outperforming the SPDR S&P Retail ETF (XRT) which has shed 27%, as well as the S&P 500, which is down 14%. – Stevens
With the latest 5.2 million weekly jobless claims, Citigroup says the 21.5 million claims in the past four weeks is equal to about a 13 percentage point increase in the unemployment rate to about 17%. But Citi economists say the April unemployment rate is more likely to be between 10% and 15%. That's because some workers will show up as no longer looking for a job in the monthly government report, if they were furloughed and have returned or plan to return to their jobs. Claims may have peaked in the past two weeks, but the economists say it's hard to determine whether that is so. Some firms will have to rehire by late June to have loans from the Paycheck Protection Program forgiven. They expect the unemployment rate to peak in April or May and then decline rapidly as rehiring occurs and businesses start to reopen.— Domm
Around midday, the Nasdaq and S&P 500 were driven higher by sharp gains from Netflix and Amazon, which traded at record highs. The Nasdaq was up more than 1% while the S&P 500 advanced 0.5%. The Dow dipped about 50 points, or 0.2%. —Imbert
Streaming platform Netflix hit an intraday all time high of $449.52 per share on Thursday, gaining nearly 5% on the day. The stay-at-home stock got a boost when Goldman Sachs hiked its price target to $490 per share, the highest on the Street with Pivotal. The firm said Netflix is benefitting from the COVID-19 shutdown and will have better-than-expected earnings next week. Shares of Netflix are up more than 35% this year. – Fitzgerald
Investors in March cashed in their mutual funds and ETFs at a pace three times faster than anything that happened during the financial crisis. Redemptions in long-term funds totaled $326 billion for the month, or about 2% of total assets, according to Morningstar. That was by far the biggest month ever, dwarfing the Great Recession peak of $104 billion in October 2008, the month after Lehman Brothers failed. Despite the washout out in stocks, which ended the longest bull market run in history, investors put a net $10.5 billion in equity-based funds. The biggest contributor to outflows came from taxable bonds, which saw $240.3 billion in redemptions. Money market funds saw a record $685 billion in inflows, bringing total assets in the safe haven to $4.3 trillion. – Cox
More than 30 stocks in the Russell 1000 are up more than 10% week-to-date, including Roku, Tesla, Amazon, Moderna, Coupa Software, Netflix, Abbott Labs, Carvana, Zscaler, RingCentral, DocuSign, MondoDB, Match Group and Smartsheet. Roku has had the best week, gaining more than 33%. The Nasdaq Composite is up 4% week-to-date, the S&P 500 is slightly negative and the Dow is down over 1%. — Francolla, Pound
The $349 billion program to provide loans to small businesses hit by the coronavirus crisis has run out of money. The loans, which can turn into grants if they are largely used for payroll expenses, were distributed on a first-come, first-served basis.
The Small Business Administration tapped banks around the country to help operate the program, and many banks complained that the guidance for the loans was not clear, leading the banks to start processing applications at different times. The SBA website now says that it cannot accept new applications for the program, though it is unclear how much of the money has been distributed. — Pound
Billionaire Paul Singer's Elliott Management said global stocks could tumble more — ultimately losing half of their value from February's high— as the world braces for the deepest recession since the 1930s-era Great Depression, according to a letter sent to clients on Wednesday and reviewed by Reuters. "Our gut tells us that a 50% or deeper decline from the February top might be the ultimate path of global stock markets," the letter said. The New York-based hedge fund manages $40.4 billion in assets. — Li
10:10 am: Analysts say buy stay-at-home stocks like Netflix & Kraft Heinz in Thursday's calls of the day
- Goldman Sachs raised its price target on Netflix to $490 from $430.
- JPMorgan raised its target price on Netflix to $480 from $410.
- Wells Fargo upgraded Kraft Heinz to overweight from equal weight.
- Bank of America resumed coverage of Monster Beverage as buy.
- JPMorgan downgraded Twitter to neutral from overweight.
- Berenberg initiated Roku as buy.
- Raymond James downgraded Square to underperform from market perform.
- Credit Suisse upgraded Smucker to neutral from underperform.
CNBC Pro subscribers can read more here. — Bloom
ConocoPhillips said Thursday that it will voluntarily cut production by 225,000 gross barrels of oil per day. The announcement came as part of a broader statement where the exploration company outlined additional savings of $3 billion, bringing the total cost cuts to more than $5 billion. "These actions reflect our view that near-term oil prices will remain weak, largely due to demand impacts from COVID-19 and continued oil oversupply," CEO Ryan Lance said in a statement. Shares were about 3% lower on the news. – Stevens
The 30-stock Dow quickly erased the opening gains, now down about 120 points. The S&P 500 and the Nasdaq were still in the green as gains in big tech provided some support. — Li
Stocks rose slightly after the opening bell as investors digested a fresh batch of corporate earnings and another dismal jobless claims report. The Dow Jones Industrial Average rose about 50 points, while the S&P 500 climbed 0.6%. The Nasdaq Composite traded 1% higher, lifted by a 2% jump in Netflix shares. — Li
Bucking the trend in corporate America, Costco is raising its dividend. The big-box retailer said it would increase its dividend by 7.7%, bringing it to 70 cents per share, or $2.80 on an annualized basis. Shares were about 1% higher in premarket trading, and have gained more than 5% this year. The S&P 500, for comparison, has shed roughly 14% this year. – Stevens
Netflix's stock has more room to run, poised to get a boost by the streaming platform's blowout earnings next week, according to Goldman Sachs. The Wall Street firm hiked its 12-month price target on Netflix to $490 per share from $430 per share, implying nearly 15% upside from Tuesday's closing price of $426.75 per share. Goldman's new price target makes it tied on the Street for the highest forecast on Netflix, according to FactSet. Pivotal also has a $490 target price. "As one of the few companies experiencing increased demand in the current environment, we expect shares will continue to outperform," Goldman Sachs equity analyst Health Terry said in a note to clients. Plus, Goldman has high hopes for the streaming company's earnings next week. "We expect Netﬂix to report 1Q results well above guidance, with over 10mn net subscriber additions, and provide initial guidance for 2Q ahead of FactSet Consensus," said Terry. Goldman believes Netflix will report 10.3 million total paid subscribers in the first quarter, well ahead of guidance of 7 million and consensus of 7.8 million. – Fitzgerald
U.S. housing starts for March came in at 1.216 million, the Commerce Department said on Thursday, compared to the expected 1.3 million. March's data is worst monthly decline since March 1984, when there was a decline of 26.42%. This is a drop from the 1.599 million starts reported for the previous month. – Fitzgerald
With airplanes grounded worldwide, United Airlines said that it would cut its May schedule by 90%. "To help you understand how few people are flying in this environment, less than 200,000 people flew with us during the first two weeks of April this year, compared to more than 6 million during the same time in 2019, a 97 percent drop," CEO Oscar Munoz said in a statement. "We expect to fly fewer people during the entire month of May than we did on a single day in May 2019," he added. Munoz said the airline would also likely scale back its June schedule, while also warning about possible job cuts. United shares slid more than 2% during Thursday's premarket trading, and are down 63% this year. – Stevens
Tom Lee, founder of Fundstrat Global Advisors, says the market bottom is likely in after the S&P 500 retraced half of its downside move from Feb. 19 to March 23. "We are in a bull market recovery, as bizarre as it sounds," Lee wrote in a note to clients. "The market has shifted into the hands of "buyers" whereas sellers were in complete control from 2/19/2020 to 3/23/2020." —Imbert
The Labor Department said a total of 5.245 million Americans filed for state unemployment benefits for the week ended April 11, versus the Dow Jones estimate of 5 million. The number marks a decline from 6.6 million in the prior week. The new filings bring the crisis total to just over 22 million, nearly wiping out all the job gains since the Great Recession. —Li
Jeff Bezos on Thursday published Amazon's annual shareholder letter, in which he detailed how the company has responded to the coronavirus pandemic so far. Bezos stressed the importance of testing in order for the public to return to work, as well as for his own employees to be protected from the virus. He pointed to Amazon's efforts to develop "incremental testing capacity," which the company announced last week. As part of that announcement, Amazon said it hopes to begin testing all of its employees, including those who show no symptoms. "Regular testing on a global scale, across all industries, would both help keep people safe and help get the economy back up and running," Bezos said. "For this to work, we as a society would need vastly more testing capacity than is currently available." – Palmer
The market's rip-roaring rally off the March 23 lows has lost some momentum in recent days, technical strategist Mark Newton said in a note. "While the trends remain quite positive near-term, there has been some slowdown in both breadth and momentum … and the rally into Tuesday's highs ahead of Wednesday's decline showed definite signs of negative momentum divergence while breadth has gotten weaker." The major averages all rose more than 2% on Tuesday, but then dropped over 1% on Wednesday.
"The takeaway is that markets DO show evidence of some internal issues that "could" lead to a decline. However, this also could simply lead to minor consolidation that ends up leading equities higher into late April," said Newton, managing member of Newton Advisors. —Imbert
U.S. oil moved higher on Thursday, one day after settling at $19.87, a level not seen since February 2002. West Texas Intermediate, the U.S. benchmark, rose 19 cents to trade at $20.06, while international benchmark Brent crude traded $1.03 higher at $28.72 per barrel. If WTI can hold onto its gains throughout the session, it will be the contract's first positive day in 5. Oil moved lower on Wednesday after the U.S. Energy Information Administration said that inventory surged by a record 19.2 million barrels for the week ending April 10 as the coronavirus pandemic continues to sap demand. Additionally, the IEA said in its monthly report that oil demand could fall by 29 million barrels per day in April, driving demand to its lowest level in 25 years. On Sunday OPEC and its allies announced a record 9.7 million bpd production cut beginning on May 1, but the move has done little to assuage traders' fears about the slowdown in demand. Since the deal was finalized on Sunday WTI has dropped more than 12%. – Stevens
There have now been more than 2 million confirmed cases of the coronavirus worldwide, according to data from Johns Hopkins University. The United States has the most confirmed cases with more than 630,000. Spain, Italy, German and France all have seen more than 100,000.President Donald Trump said on Wednesday night that he would release guidelines for states to reopen their economies on Thursday.There have been at least 138,008 deaths due to the virus worldwide, including more than 30,000 in the U.S., according to Johns Hopkins. — Pound
Staffers for Sen. Chuck Schumer, D-NY, and House Speaker Nancy Pelosi, D-Calif., will continue talks with the Treasury Department on Thursday regarding additional coronavirus relief, a senior Democratic aide told CNBC. Those talks come as $349 billion in funding for small businesses is quickly being wiped out. —Imbert, Hirsch.
The Labor Department is scheduled to release at 8:30 a.m. ET its report on the number of Americans who filed for state unemployment benefits last week. Economists polled by Dow Jones expect initial claims for the week ended April 11 to total 5 million, a decline from 6.6 million in the prior week but still an eye-popping number on a historical basis. Thursday's release could see the U.S. economy clinch an important milestone amid the coronavirus outbreak: the erasure of all of the nonfarm job gains since the throes of the Great Recession and financial crisis if claims exceed 5.662 million. — Franck
The S&P 500 is back to looking expensive, Bank of American equity and quant strategist Savita Subramanian said in a note to clients Thursday. Looking at 20 valuation frameworks, including trailing PE, EV/EBITDA and EV/sales, the firm found that the benchmark index is "richer" than average on many of these key metrics. The three exceptions are "lower than average Price to Free Cash Flow, cheaper relative to bonds and relative to gold." From a momentum and value play standpoint Bank of America said health care, tech and communication services look the best, while materials, energy and consumer discretionary rank the worst. "Today's valuations suggest S&P 500 annualized 10-yr price returns of 4%-5%. This is lower than average returns in prior decades and roughly half of the 8% annualized price return we've enjoyed since post-WWII (1947)…But if we consider total returns of 6% to 8% (assuming a dividend yield of 2% to 3%), US equities' annualized returns are still very competitive with other similar-in-quality asset class returns," Subramanian said. —Stevens
Morgan Stanley on Thursday posted a first-quarter profit that missed analysts' expectations, but the firm's trading desks generated about $700 million more revenue than expected. The bank said in a release that earnings dropped 30% to $1.7 billion, or $1.01 a share, compared with the $1.14 estimate of analysts surveyed by Refinitiv. Shares of Morgan Stanley dipped 0.8% in premarket trading. – Son, Li
Stock futures rose slightly on Thursday, following a big sell-off in the previous session, as both corporate results and economic data fueled concerns about an economic fallout caused by the coronavirus pandemic. Futures on the Dow Jones Industrial Average erased earlier losses and implied an opening gain of about 90 points. S&P 500 and Nasdaq futures also turned positive. Investors are bracing for Labor Department's report on last week's initial jobless claims at 8:30 a.m. ET, which economists polled by Dow Jones expected to total 5 million. — Li
— With reporting from Noah Higgins-Dunn, Patti Domm, Jeff Cox, Gina Francolla, Thomas Franck, Michael Bloom, Hugh Son, Jesse Pound, Fred Imbert and Lauren Hirsch.
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