Market Snapshot: Dow futures turn positive after Americans filing for jobless benefits shrink

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U.S. stock-index futures turned positive on Thursday after a weekly snapshot of the labor market showed less Americans filed for unemployment benefits than had been forecast, easing concerns about the recent impact of a resurgence of the COVID-19 pandemic on the economy.

But a stalemate in Congress over coronavirus aid for out-of-work Americans loomed ahead of Friday’s self-imposed deadline for lawmakers.

How are equity benchmarks performing?

Futures for the Dow Jones Industrial Average YM00, +0.14% YMU20, +0.14% were trading up 12 points, or less than 0.1%, at 27,068, those for the S&P 500 ES00, +0.03% ESU20, +0.03% were 1.50 points, or 0.1%, lower at 3,314.50, while Nasdaq-100 futures NQ00, +0.15% NQU20, +0.15% were inching up 5.25 points, or 0.1%, at 11,097.

On Wednesday, the Dow DJIA, +1.39% rose 373.05 points, or 1.4%, to settle at 27,201.52, its largest daily percent gain since July 14 and putting at its highest level since June 9, while the S&P 500 SPX, +0.64% gained 21.26 points, 0.6%, to end at 3,327.77, putting it off 1.7% from its Feb. 19 all-time high. The Nasdaq Composite Index COMP, +0.52% added 57.23 points, 0.5%, closing at 10,998.40, the 31st record for the tech-heavy index.

What’s driving the market?

A day after the sharpest gain for the Dow in about three weeks, markets were showing more muted moves on early Thursday. Still, a lower-than-expected jobless claims number added a bullish tone to trading.

The number of Americans filing for jobless benefits for the week ended Aug. 1 came in at a three-week low of 1.186 million, a decline of 249,000 from the previous week’s reading of 1.435 million. The average estimates from economists polled by Econoday were for a weekly increase in new claims to 1.442 million.

The number of people receiving traditional jobless benefits through the states, known as continuing claims, dropped by a seasonally adjusted 844,000 to 16.1 million in the week ended July 25.

A steady decline in jobless claims ground briefly came to a halt in July to amid a surge in Covid-19 cases in California, Texas, Florida and many other states. Some restrictions were reimposed on businesses and companies were forced to lay off or furlough workers, some for the second time.

Confirmed cases of COVID-19 approached 19 million on Thursday, according to data aggregated by Johns Hopkins University, and the death toll rose to 708,036. The U.S. case tally climbed to 4.8 million, while the death toll rose to 158,256.

Rising cases have put in doubt hopes for a so-called V-shaped or sharp and quick recovery from the recession created by the pandemic, as applications for jobless claims remain at historically high levels after easing for several months.

Meanwhile, congressional lawmakers struggled to strike a deal on a fresh round of coronavirus relief for those Americans out of work.

The Trump administration on Wednesday floated the idea of taking executive action if Democrats and Republicans aren’t able to reach a compromise on providing further assistance to those worst hit by the viral outbreak.

“If Congress can’t get it done, the president of the United States will,” White House Chief of Staff Mark Meadows told CNN in a Wednesday interview, a point that Trump reiterated at a news conference. “We are negotiating right now as we speak, and we’ll see how it works out,” the president said.

Democrats and Republicans have been at loggerheads, as they run up against a self-imposed deadline of Friday, over the scope of any new aid package, including over how much to provide in federal jobless assistance, which provided an extra $600 a week before it expired in July, in addition to state provided benefits.

Check: The market is underpricing the possibility of a vaccine, Goldman Sachs strategists say

Meanwhile, signs of growing China-U.S. tensions were evident as U.S. Secretary of State Mike Pompeo asked American companies to consider withholding their apps from phones made by China’s Huawei Technologies, according to analysts. Those comments come as the U.S. has threatened to ban China-owned entertainment applications TikTok unless Microsoft Corp. MSFT, -0.16% can strike a deal to buy all or part of the company from ByteDance.

Elsewhere, the Bank of England held its benchmark interest rate steady and said the U.K. economy will take until the end of 2021 to make up the ground lost during the pandemic, after its economy suffered a steep slide.

“The outlook for the U.K. and global economies remains unusually uncertain. It will depend critically on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these,” said Bank of England Gov. Andrew Bailey.

Which stocks are in focus?
  • Burger King parent Restaurant Brands International Inc. QSR, -0.24% reported Thursday second-quarter profit that beat expectations, as revenue fell 25% but topped forecasts.
  • ViacomCBS Inc. VIAC, -2.07% rose 6% premarket Thursday, after the company posted better-than-expected profit and sales for the second quarter.
  • Mylan N.V. MYL, +3.55% swings to profit as sales fall slightly short of estimates.
  • Shares of USA Today parent Gannett Co. Inc. GCI, -3.46% rose in premarket trading, after the media company reported it swung to a large second-quarter loss after an impairment charge while revenue rose 90%, boosted by the legacy Gannett acquisition.
  • Bausch Health Cos. shares BHC, +2.47% soared in premarket trade Thursday, after a Wall Street Journal report that the company is planning to spin off its eye-care business from its core pharma operations, citing people familiar with the matter.
  • Shares of Hilton Worldwide Holdings Inc. HLT, +2.14% slipped in premarket trading Thursday, after the hotel operator reported a second-quarter loss that was wider than expected, with revenue dropping 77%, as the COVID-19 pandemic had a “significant adverse impact” on occupancy.
  • Bristol-Myers Squibb Co. BMY, +0.37% shares gained 4.2% in premarket trading on Thursday on better-than-expected earnings and a positive patent ruling for its blood thinner drug.
  • Costco Wholesale Corp. COST, +0.05% said Wednesday that July sales rose 14% to $13.04 billion, from $11.43 billion in July 2019. Same-store sales rose 13.2%, including a 13.3% increase in U.S. same-store sales. E-commerce sales increased 75.3%, the company said.
  • Bright Horizons Family Solutions Inc. shares BFAM, +1.31% are in focus after the child-care provider’s results topped Wall Street expectations amid the COVID-19 pandemic.
  • Blue Apron Holdings Inc. APRN, -1.98% announced Wednesday it would sell more shares after a pandemic-fueled gain in its previously woeful stock price, sending shares in the meal-kit-by-mail service down in after-hours trading.
  • ADT Inc. ADT, +0.07% shares were in focus after the security products company’s revenue topped Wall Street estimates. The company last week struck an agreement with Google parent Alphabet Inc. GOOG, +0.59% GOOGL, +0.39% to create smart home security products.
  • Western Digital Corp. shares WDC, -0.64% are in focus following an earnings report that included a disappointing forecast for the hard-drive maker’s new fiscal year.
How are other markets trading?

The 10-year Treasury note yield TMUBMUSD10Y, 0.521% slipped 2.5 basis points to 0.52% after trading at 0.541% on Wednesday. Bond prices move inversely to yields.

The greenback was virtually unchanged, with the ICE U.S. Dollar index DXY, +0.02% up less than 0.1% at 92.883.

In Europe, the Stoxx Europe 600 index SXXP, -0.60% headed 0.9% lower, and the FTSE 100 UKX, -0.84% traded nearly 2% lower after the Bank of England’s gloomy outlook.

In Asia, China’s CSI 300 index 000300, -0.30% ended trade off 0.4%, while Japan’s benchmark Nikkei NIK, -0.42% closed 0.4% lower. Hong Kong’s Hang Seng Index HSI, -0.68% closed off 0.7%.

Oil futures pulled back after its highest close in five months, with the U.S. benchmark CL.1, +0.40% shedding 0.8% to $41.86 a barrel on the New York Mercantile Exchange. Gold futures for December GCZ20, +0.83% extended their climb, rising 0.7% to $2,064.40 an ounce.

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