Here are the most important news, trends and analysis that investors need to start their trading day:
U.S. stock futures were flat after two days of strong gains, making Monday's major sell-off seem like a distant memory. The Dow rose another 286 points, or 0.8%, on Wednesday. Coupled with Tuesday's 549 point gain, the 30-stock average turned positive for the week. The S&P 500 and Nasdaq also gained nearly 1% on Wednesday. All three stock benchmarks, ahead of Wall Street's open Thursday, were less than 1% from their latest record closes on July 12. Investors seem to have shaken off their immediate concerns about the spread of the delta variant and the increase in Covid cases.
The Labor Department reported Thursday an unexpected jump in initial jobless claims to 419,000 for last week, the highest weekly count since May 15. New filings for unemployment benefits for the prior week were upwardly revised to 368,000, matching last month's Covid-era low. After the jobless claims report, the 10-year Treasury yield turned lower to roughly 1.27% after hitting a 5½-month low of nearly 1.13% earlier this week. Bond yields move in the opposite direction of bond prices. Stocks also took a premarket knock on the claims data.
Coming up later Thursday, at 10 a.m. ET, The National Association of Realtors issues its June report on existing home sales. Economists expect a 2.2% increase to an annual rate of 5.93 million units. Existing home sales dropped 0.9% in May. Snap and Twitter will be the first of the major ad-supported internet companies to report earnings after-the-bell Thursday, while Alphabet's Google, Facebook, Pinterest, and Amazon will follow next week. Apple's recent privacy changes won't likely affect those Q2 tech earnings.
AT&T on Thursday beat analyst estimates for monthly phone bill paying subscriber additions in the second quarter, fueled by more Americans converting to 5G. WarnerMedia, the company's media unit, added 2.8 million U.S. subscribers for its premium channel HBO and streaming platform HBO Max during the quarter. In May, AT&T agreed to spin off and combine its media assets with Discovery in a deal expected to close in mid-2022. AT&T's per-share earnings of 89 cents beat expectations, as did revenue of just over $44 billion. Shares rose about 1.5% in the premarket.
American Airlines on Thursday posted a profit for the second quarter, getting a lift from federal aid and a surge in travel demand. The Fort Worth-based carrier reported net income of $19 million, snapping five consecutive quarters of losses. However, adjusting for one-time items, American lost $1.69 per share, less than expected. Revenue rose 360% year over year to $7.48 billion after last year's Covid collapse. Sales still dropped 35% compared with Q2 2019.
Southwest also reported a jump in revenue in the quarter. The Dallas-based airline's sales rose nearly 300% from a year earlier to $4 billion. That was still down 32% from the period in 2019. Net income for the second quarter totaled $348 million, compared with a $915 million loss a year earlier. On an adjusted basis, Southwest lost 35 cents per share, more than expected. Shares of Southwest and American were lower in the premarket.
White House chief medical advisor Dr. Anthony Fauci said fully vaccinated people might want to consider wearing masks indoors as a precaution against the rapidly spreading delta variant. Some areas of the country are reimplementing mask mandates due to spikes in cases. The more transmissible variant now makes up roughly 83% of sequenced Covid cases in the country, according to the Centers for Disease Control and Prevention. Variants are more transmissible than the original strain and some are reducing the effectiveness of vaccines.