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Markets Prepare for Jobless Claims Data

Wall Street’s main indexes prepared to open lower on Thursday at the end of a strong month in the stock market. A grim U.S. jobless claims data overshadowed positive results from Facebook and Tesla.

The Labor Department showed that initial unemployment claims totaled 3.84 million for the week ended April 25. It was down from 4.44 million in the previous week and a record 6.87 million in March.

Although the downward trend raised hopes that COVID-19’s impact on the labor market had peaked, investors were still wary. They were cautious of the pace of economic recovery from a looming recession.

Art Hogan, Chief Market Strategist at National Securities in New York said they’ve taken jobless claims data for granted. They know that economic data, as it pertains to labor, is bad and is going to get worse, he added.

Still, the S&P 500 is on course for its best month since 1974. It is powered by dramatic U.S. monetary and fiscal stimulus. Moreover, it hopes of a revival in business activity as states reopen from lockdowns.

All three U.S. stock indexes ended Wednesday’s stock trading session closer to all-time highs reached in February. This was after data from a trial of Gilead Science Inc’s antiviral remedies showed better recovery rate in COVID-19 patients.

The Federal Reserve pledged to expand emergency programs to revive growth but it dashed hopes for a fast rebound. It said the economy could feel the weight of consumer fear and social distancing for a year.

Markets Expect Stocks to Slide After Jobless Claims Data

Dow e-minis were down 254 points, or 1.03%, while S&P 500 e-minis were down 29.75 points, or 1.01%. Moreover, Nasdaq 100 e-minis were down 31.75 points, or 0.35%.

Analysts forecast a sharper decline in second-quarter corporate earnings after jobless claims data. Profits for S&P 500 companies expected to drop 36% following a 15% anticipated drop in the first quarter.

Facebook Inc jumped 7.1% in premarket trading after beating analysts’ estimates for first-quarter revenue. It said it had seen “signs of stability” for ad sales in April after a plunge in March.

Electric car maker Tesla Inc climbed 7.3% after posting its third straight quarterly profit. It took investors by surprise as its automaker peers were hit by a slump in consumer demand and factory shutdowns.

But Twitter fell 6.3% even as it said ads sales had slightly rebounded in Asia. This was after a plunge due to COVID-19 and that it had accelerated work on tools to attract key advertisers.

McDonald’s Corp shed 1.6% after it reported a 16.7% slide in quarterly profit. Most of its fast-food chains across the globe limited their services to deliveries and take-aways.

American Airlines fell 6.8% as the airline operator posted its first quarterly loss since emerging from bankruptcy in 2013. It warned of a $70 million a day cash burn.

These U.S. stocks fell Thursday following weak reports on consumer spending and jobless claims data.

The two remaining FAANG stocks, Apple Inc and Amazon.com will report results after markets close.



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