Stocks started Thursday off in impressive fashion, but that strength wilted throughout the day as market participants digested more bad economic data and headlines and reports that novel coronavirus cases are rising in Texas and that nearly 14% of New Yorkers carry symptoms of the illness. Those are the second- and fourth-largest states, respectively.
- The S&P 500 fell 0.05%
- The Dow Jones Industrial Average rose 0.17%
- The Nasdaq Composite inched lower by 0.01%
- For the first time in awhile, UnitedHealth Group (NYSE:UNH) was the Dow’s top performer, adding 3% today.
Thursday is jobless claims today and suffice to say, the latest numbers aren’t good, but they were less bad. Last week, 4.43 million Americans applied for jobless benefits, bringing the five-week tally to a staggering 26.5 million. The prior week’s figure was also revised lower to 5.24 million. However, the problem areas include some of the largest states.
“California reported the most initial claims last week, at an unadjusted 533,600, down from 655,500 the prior week. Florida was next, followed by Texas at 280,400, up slightly from the prior week,” reports Bloomberg.
Peak unemployment claims were probably notched a couple of weeks, but the outlook is still dismal as some economists believe the U.S. rate of joblessness is heading for 20%.
To some extent, stocks fought off that ominous prediction as 18 of 30 Dow members were higher in late trading.
Apple (NASDAQ:AAPL) didn’t do much today despite reports that the company is aiming to sell Macs powered by in-house semiconductors next year. Reports indicate Apple will unveil at least one Mac next year with its own chips and this could be a growing theme across Apple’s product line because the company is searching for new processors as an avenue for setting itself apart from rivals.
Apple wasn’t the only Dow Jones tech name subject to the rumor mill today. Microsoft (NASDAQ:MSFT) closed slightly lower — more a testament to today’s sluggish action than anything else — amid rumors that the company is planning a big-time game reveal sometime soon. For now, it’s a rumor, but it makes sense because video game hardware makers, including Microsoft, are expected to launch new consoles later this year.
Not Reacting to Bad News
Walt Disney (NYSE:DIS) is one of the poster children for coronavirus equity erosion, but the stock traded modestly higher despite another day of challenging headlines. This time around, it was Standard & Poor’s downgrading Disney’s credit rating to “A-” from “A” while keeping a “negative” outlook on the rating.
“Disney’s theme parks won’t likely return to normal capacity utilization at the same rate as the overall economy even after stay-at-home restrictions are eased and the theme parks are allowed to reopen,” said the ratings agency.
Another Wild Day for Oil
Oil notched another epic rally, this time it was 20% intraday gain, helping Exxon (NYSE:XOM) and Chevron Corporation (NYSE:CVX) into the Dow winners circle. Speculating as to long oil upside will last is tricky, but it pays to remember this is coming against the backdrop of weak demand and poor economic data.
Bottom Line on the Dow Jones Today
Making near-term equity market upside something of a dubious proposition is that, as FactSet points out, global economic data is slack, meaning Covid-19 is hampering more than just the U.S. and Chinese economies.
“Analysts surveyed by FactSet are now forecasting a 2.9% contraction in U.S. GDP in 2020; this compares to the 1.8% expansion predicted at the end of February,” according to the research firm. “The Eurozone economy is expected to shrink by 4.8% in 2020 while the UK is projected to see its economy contract by 4.9%. China’s GDP is expected to grow by just 2.2%, the country’s slowest GDP growth since official records began.”
Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities.