The market's strong rally this week took a breather on Thursday as data showed another 2.4 million people filed for unemployment benefits last week, bringing the total number of filings during the pandemic to more than 38 million. Meanwhile, rising tensions between the U.S. and China added to concerns about the overall economic recovery. Here's what happened:
- Dow closed down 0.41% for its second negative day in three
- Dow is up 3.33% week to date, on pace for its best week since April 9 when the Dow gained 12.67%
- Dow is down 14.24% year to date, on pace for its worst year since 2008 when the Dow lost 33.64%
- Dow is 17.23% below its intraday all-time high of 29,568.57 from Feb. 12
- S&P 500 closed down 0.78% for its second negative day in three
- S&P 500 is up 2.96% week to date, on pace for its second positive week in three
- S&P 500 is down 8.74% year to date, on pace for its worst year since 2008 when the S&P 500 lost 38.49%
- S&P 500 is 13.11% below its intraday all-time high of 3,393.52 from Feb.19
- 10 out of 11 sectors were negative Thursday, led by energy down 1.48% — Francolla
Stocks' solid rally this week took a pause on Thursday with the Dow Jones Industrial Average falling about 100 points. The S&P 500 dipped 0.7%, while the Nasdaq Composite traded 0.3% lower. Small caps outperformed as the Russell 2000 eked out a 0.3% gain. With Thursday's losses, the S&P 500 is still up about 3% this week. — Li
A bill that could force foreign companies to delist from U.S. stock exchanges is moving at "warp speed" and is currently being discussed the House of Representatives, Raymond James says. The Holding Foreign Companies Accountable Act, which was passed in the Senate on Wednesday by unanimous consent, would require companies seeking access to U.S. capital markets to certify that they aren't owned or controlled by a foreign government. It would also require the SEC to bar trading in any securities where the company's auditor hasn't been inspected by U.S. regulators for three consecutive years. The legislation, which would apply to any foreign company, is largely seen as a swipe at China and its companies hoping to list on U.S. exchanges. — Franck
The major averages traded lower with about an hour left in the trading session as investors grappled with continuing dismal unemployment data and rising U.S.-China trade tensions. The Dow was down more than 100 points, or 0.5%. The S&P 500 traded 0.7% lower while the tech-heavy Nasdaq slid 0.8%. Still, all three indexes were up at least 3% for the week. — Imbert
Oil prices jumped to their highest level since March 11 on Thursday as the demand outlook continues to improve. West Texas Intermediate gained 43 cents, or 1.28%, to settle at $33.92 per barrel. During the session it hit a high of $34.66. Meantime international benchmark Brent crude settled 31 cents, or 0.87%, higher at $36.06 per barrel. WTI is still far from its January high of more than $60 per barrel, but with economies beginning to reopen, gasoline demand has turned a corner. Additionally, producers have shut-in wells at record rates, which has also supported oil prices. WTI is up more than 14% this week, and is on track for its fourth straight week of gains. – Stevens
Many Americans received stimulus checks from the government in the mail in mid-April and data shows some of that money was used to trade stocks. Securities trading was among the most common uses for the government stimulus checks in nearly every income bracket, according to software and data aggregation company Envestnet Yodlee. For many consumers, trading was the second or third most common use for the funds, behind only savings and cash withdrawals, the data showed. "There's clearly a correlation between Covid and people being reengaged with their money," Bill Parsons, Group President, Data Analytics at Envestnet Yodlee told CNBC. —Fitzgerald
New York City is on pace to begin its phased reopening in the first half of June as the number of people admitted to the city's hospitals and those currently in intensive-care units for the coronavirus continues to fall, Mayor Bill de Blasio said, citing "remarkable progress." Meanwhile, New York public schools should start preparing plans to reopen this fall, but Gov. Andrew Cuomo said Thursday it's too early to know for sure whether that will happen. –Li
Michael Arone, chief investment strategist at State Street Global Advisors, said the divergence between the stock market and the economy needs to be reconciled at some point. "I think in the second half of the year, those two things need to converge," he told CNBC. "The economy needs to begin to recover and reflect the optimism [in stocks] or I think that would be a risk for the rally that we've seen." The S&P 500 has rallied about 35% ever since hitting an intraday low on March 23. However, job losses keep mounting and economic activity continues to plummet. "Eventually, the rubber needs to meet the road," Arone said. —Imbert
Bank of America's Savita Subramanian said stocks could get a massive inflow of $1 trillion given how attractive equity valuations are relative to bonds. "The extreme attractiveness of stocks over bonds, particularly as rates have plummeted back to near zero, can be the catalyst for the rotation into stocks, driving the market higher," Subramanian said in a note to clients. —Imbert
Around midday, the major averages were under pressure as investors took a breather following a blistering rally earlier in the week. The Dow was down nearly 100 points, or 0.4%, while the S&P 500 slid 0.7% along with the Nasdaq. The averages were still headed for strong weekly gains despite Thursday's decline. —Imbert
The major averages hit their session lows in late-morning trading, with the Dow briefly trading 200 points lower. Despite the steep losses, the major averages were still up more than 2% for the week. —Imbert
The Nasdaq is now the relative underpeformer among the three major indexes, falling 0.6% as some of the megacap tech stocks gave up earlier gains to trade below the flat line. Facebook was still trading 2.3% higher, however. The S&P 500 was down 0.3%, while the Dow was roughly flat. —Pound
Manufacturing activity in the U.S. improved in May but remains muted amid lackluster demand that has led to steep job cuts, according to a closely watched gauge. The IHS Markit Flash U.S. Manufacturing PMI Index registered a 39.8 reading for the month, up from 36.1 in April and a shade better than the 39 that economists surveyed by Dow Jones had expected. Anything lower than a 50 represents a contraction for the index, which measures businesses seeing expansion vs. contraction.
"Encouragement comes from the survey indicating that the rate of economic collapse seems to have peaked in April. In the absence of a second wave of COVID-19 infections, the decline should moderate further in coming months as measures taken to contain the coronavirus are steadily lifted," said Chris Williamson, chief business economist at HIS Markit.
Williamson added, though, that "a full recovery is unlikely to be swift." The services index was 36.9, better than the 30 estimate. The composite reading was 36.4. The numbers are consistent with a Q2 GDP drop of 37%, Williamson said. –Cox
10:24 am: Here are Thursday's biggest analyst calls of the day: Boeing, Royal Caribbean, Nvidia & more
- Stifel upgraded Lowe's to buy from hold.
- RBC initiated Boeing as outperform.
- Morgan Stanley upgraded Avis Budget to equal weight from underweight.
- Credit Suisse initiated Royal Caribbean and Norwegian as outperform.
- Bank of America downgraded MGM to underperform from neutral.
- Citi raised its price target on Netflix to $450 from $350.
- Bank of America downgraded Charles Schwab to neutral from buy.
- UBS downgraded Square to sell from neutral.
- Credit Suisse reinstated Nvidia as outperform.
Pro subscribers can read more here. —Bloom
Later this morning the NYSE's first all-virtual IPO will take place, when SelectQuote opens for trading. The company, which focuses on insurance products, raised $570 million after pricing at $20 per share, above the range of $17 to $19. The company is now valued at $3.25 billion, according to Reuters. Shares will trade under the ticker SLQT.
SelectQuote CEO Tim Danker will be on CNBC's "Squawk Alley" at 11 am ET to discuss the company's IPO. – Stevens
A few minutes after the opening bell, stocks reversed losses and turned positive. The Dow was up about 50 points, while the S&P 500 rose 0.11%. The Nasdaq was the relative outperformer, last trading 0.2% higher. – Stevens
Stocks started Thursday's session modestly lower, as some of Wednesday's optimism cooled. The Dow fell 42 points for a loss of 0.15%, while the S&P 500 shed 0.007%. The Nasdaq traded slightly higher. Weekly jobless claims totaled 2.4 million, which was still very high by historical standards, but marked the seventh straight week of a slowdown in the number of people filing for unemployment insurance. The number peaked at 6.9 million in late March. – Stevens
Oil prices moved higher on Thursday, accelerating recent gains as the Street continues to cheer growing demand as more and more producers cut output. West Texas Intermediate, the U.S. benchmark, gained 80 cents, or 2.4%, to trade at $34.33 per barrel, while international benchmark Brent crude rose $1.01 to $36.76 per barrel. Oil is on track for its fourth straight week of gains, although WTI is still roughly 50% below its January high of $65.65. "Oil prices rose on very clear indications that the global supply has been curtailed to a great degree," Rystad Energy's Paola Rodriguez Masiu said Thursday. "Many producers have curtailed production and, although painful for them, it really did have an effect on prices," she added. – Stevens
The May reading for the Philadelphia Fed manufacturing survey index came in at -43.1, a 13-point improvement from April's record low but still the third straight negative reading. However, as Renaissance Macro pointed out on Twitter, the survey shows that managers expect the dip to be short-lived, with six-month expectations at their highest level in more than two years. — Pound
Tensions between the U.S. and China escalated again recently over issues surrounding the coronavirus pandemic. The Trump administration has been ratcheting up the rhetoric on China. On Wednesday, President Donald Trump blasted China over the handling of the coronavirus in a tweet, saying that it was the "incompetence of China" that caused "this mass Worldwide killing." Meanwhile, the Senate passed legislation that could ban many Chinese companies including Alibaba and Baidu from listing on U.S. exchanges. The bill would require companies to certify that they are not controlled by a foreign government. – Li
Initial jobless claims rose 2.438 million, compared with the 2.4 million analysts had been expecting. This represents the seventh straight week of a slowing pace following the peak of 6.9 million claims in late March. Additionally, a review brought the number from last week down substantially, from 2.98 million claims to 2.69 million. - Stevens, Cox
Shares of Best Buy fell 2% in premarket trading after the electronics retailer reported its first quarter results. The company beat Wall Street estimates on the top and bottom lines, but it did not give future guidance. Comparable sales were down 5.3%, even though online sales in the United States increased by 155%. Sales of consumer electronics fell by more than 15%. — Pound
Data compiled by Johns Hopkins University shows global coronavirus cases have topped 5 million. That grim milestone comes as several countries have started to ease lockdown measures. In the U.S. specifically, more than 1.5 million cases have been confirmed. Most of the worldwide new cases come from the Americas, with over 45,000 cases reported Tuesday in the U.S. — Imbert
Another 2.4 million Americans were expected to file claims for unemployment insurance last week, according to economists surveyed by Dow Jones. If accurate, that would bring the rolling nine-week total during the coronavirus pandemic to close to 39 million. The numbers have been steadily declining in recent weeks but still reflect what likely will be the worst unemployment crisis in U.S. history. – Cox
U.S. stock index futures pointed to slight losses at the open on Thursday, as the market awaits jobless claims data at 8:30 am ET. The Dow Jones Industrial Average was set to decline about 75 points at the opening bell, or 0.3%. The S&P 500 was also poised for a 0.3% loss, while the Nasdaq Composite was set to slide 0.2%. The move lower continues stocks' push-and-pull this week, which saw markets jump on Monday, drop on Tuesday, and rise again on Wednesday. The S&P rose to its highest level since early March during Wednesday's trading session as investors continue to cheer economies reopening. The benchmark index is now about 12% below its record high from Feb. 19. - Stevens
- CNBC's Yun Li, Nate Rattner and Jeff Cox contributed reporting.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.