S&P 500 and Dow Futures Drift Lower
Futures tracking the S&P 500 and Dow indexes edged lower in the stock market Thursday. Caution over an increase in COVID-19 infections in parts of the United States and China weighed down the mood. This was ahead of a weekly jobless claims report.
Several states including Texas, Florida, and Oklahoma have reported a surge in new infections. However, President Trump said late on Wednesday that the United States would not close businesses again.
Beijing’s latest COVID-19 outbreak had been brought under control. This was according to the chief epidemiologist of China’s Center for Diseases Prevention and Control.
Recent data showed a rise in U.S. retail sales and an unexpected addition in jobs in May. Stocks investors will now look to the Labor Department’s weekly jobless claims report, the most timely indicator of economic health.
The number of Americans filing for state unemployment benefits is likely to decline for the eleventh straight week. But the number still remains elevated following mass furloughs and layoffs during the nationwide lockdowns.
Dow Futures Drop, Airlines and Retailers Slide
Carnival Corp fell 3.6% in premarket stock trading after reporting a quarterly net loss of $4.4 billion. It also projected a loss for the rest of 2020 after the pandemic brought its cruise business to a standstill.
Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings Ltd dropped 2.2% and 3.2%, respectively.
Meanwhile, airlines, retailers, and cruise lines led to the early declines in stocks. United Airlines fell by 4.2% while Delta and American dropped 3.3% and 3.7%, respectively. Nordstrom and Kohl’s both slid more than 2%.
Scott Wren, Wells Fargo’s senior global market strategist said, they believe the market is pricing in the good news. The rally is likely to take a breather in the coming months as the recovery evolves.
They expect volatility in the coming months as they gauge how the reopenings go. They also gauge how consumer spending is progressing, Wren added.
Initial U.S. weekly jobless claims increased more than expected last week, coming in at 1.508 million. Moreover, economists polled by Dow Jones expected a print of 1.3 million.
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