(Reuters) – Wall Street was set to open higher on Thursday as weekly jobless claims fell slightly from the previous week and on hopes President Donald Trump would push to ease strict stay-at-home restrictions.
FILE PHOTO: The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., April 13, 2020. REUTERS/Andrew Kelly
Latest data showed jobless claims fell slightly to 5.2 million last week from an upwardly revised 6.62 million the week before, but the total figure for the past month still topped 20 million as the outbreak crushed business activity.
“This is an awful number, but it is lower than the prior two weeks and I do believe we have peaked,” said David Bahnsen, chief investment officer at Bahnsen Group in Newport Beach, California.
“What the market cannot price in perfectly is when the economy re-opens, what the nuances in that reopening will look like and what its impact will be to corporate profits one quarter, two quarters and a year away.”
Trump is expected to announce “new guidelines” for re-opening the economy at a news conference on Thursday as he said data suggested the United States had passed the peak on new coronavirus infections.
After a 27% rally from its March lows, the S&P 500 index inched down this week and stands 18% below its record high, as first-quarter earnings began with U.S. banks preparing for a wave of future loan defaults following a halt in business activity.
Analysts estimate earnings for S&P 500 companies slumped 12.8% in the first quarter, with U.S. economic growth expected to have contracted at its fastest pace since World War Two.
“There is some potential for a rebound (in the economy) later this year and into next year, but the risks are still predominantly to the downside,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
On Thursday, BlackRock Inc (BLK.N), the world’s largest asset manager saw the capital it manages fall by almost $1 trillion in the quarter as investors pulled money out of its marquee funds.
Medical equipment maker Abbott Laboratories Inc (ABT.N) beat quarterly profit estimates, but suspended its full-year forecast due to uncertainty caused by the virus outbreak.
Morgan Stanley (MS.N) reported a 32% fall in quarterly profit as its advisory and wealth management businesses took a hit from the economic fallout of the pandemic. Its shares slipped 2.8%.
At 8:58 a.m. ET, Dow e-minis 1YMcv1 were up 93 points, or 0.4%, S&P 500 e-minis EScv1 were up 15 points, or 0.54% and Nasdaq 100 e-minis NQcv1 were up 87.25 points, or 1.02%.
Chipmakers Qualcomm Inc (QCOM.O), Intel Corp (INTC.O), Nvidia Corp (NVDA.O) and Advanced Micro Devices Inc (AMD.O) were up between 1.5% and 2.1% after the world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW) reported a near doubling in first-quarter net profit.
Netflix Inc (NFLX.O) rose 1.8% after multiple brokerages hiked their price targets on the stock expecting higher subscriber growth during the lockdown.
However, United Airlines Holdings Inc (UAL.O) slipped 2.9% as the carrier said it cut its flight schedule by 90% for May and warned travel demand now “essentially at zero shows no sign of improving in the near term”, making job cuts likely.
Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Sagarika Jaisinghani and Shounak Dasgupta