The 30-stock Dow was down about 200 points, or 0.8%, around 1 p.m. ET. The S&P 500 dipped 0.1%. The Nasdaq Composite, however, rose 0.7% as Amazon and Netflix reached record levels. (Click here for the latest market news.)
New York Gov. Andrew Cuomo said Thursday the state, in coordination with other states, will keep nonessential businesses shut down until May 15. The extension comes even as the hospitalization rate in New York has fallen.
“There has to be a balance. You know, there’s also death involved in keeping [the economy] closed,” Trump said from the White House. “We have to get back to work.”
More bad economic data
The Labor Department said 5.245 million Americans filed for unemployment benefits in the week of April 11. Last week’s claims total brought the number of job losses to 22 million during the coronavirus outbreak.
However, Grant Thornton Chief Economist Diane Swonk pointed out the pace of weekly claims declined last week.
“It’s not exactly good news when the pain is compounding but it should be peaking,” Swonk said. “We are going to be disbursing 1.3 million plus small business loans. They have to start using that money within 10 days, which means we’ll people brought back on the payrolls in May and June.”
The Philadelphia Federal Reserve’s business conditions index hit its lowest level since July 1980 as activity in the region slumped this month. U.S. housing starts plunged 22.3% in March.
Thursday’s moves followed a slump during regular trading on Wednesday as gloomy economic data and anemic bank earnings fueled concerns over the coronavirus’s impact on the U.S. economy.
The Dow and Nasdaq both fell more than 1% on Wednesday while the S&P 500 lost 2.2% on the back of disappointing retail sales data.
Despite the recent dismal economic data, some market strategists pointed to a slowdown in the daily number of new U.S. coronavirus cases and the flattening in the net number of hospitalizations in New York state as evidence that markets may trend upward in the coming weeks.
JPMorgan’s Marko Kolanovic said Wednesday evening that such improvements in health-care data could encourage state governments to take “baby steps” to reopen certain economies as soon as next week.
Kolanovic, the global head of quantitative and derivatives strategy at JPMorgan, reiterated his forecast that the U.S. equity market could reach new all-time highs as soon as the first half of 2021 if the economy is set to recover later that year.
Better health-care figures mean “we think it’s gonna be possible to reopen it sooner. We think within a week from now, you will start seeing some limited moves,” he told CNBC’s “Fast Money.”
“It’s going to be limited: I’m talking baby steps,” he added. “But that tells us that by the summertime, we may more substantially recover. And sometime next year — maybe the second half of next year — the economy reaches the high watermark. Which means that the market could reach a high watermark in the first half of next year.”
The Dow and S&P 500 remain more than 20% and 17.9% below their respective all-time highs set in February as marketplace jitters over the spread of the novel coronavirus and an uncertain vaccine timeline foster volatile trading on Wall Street.
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