It was a wobbly day for Wall Street with more stocks falling than rising as unemployment claims surged and New York extended its state lockdown. More than 20 million Americans have lost their jobs in the past four weeks, and residential construction and manufacturing both plummeted in March, according to official data out Thursday.
Meanwhile, the shutdown in New York was extended until May 15 even as coronavirus-related hospitalizations and deaths fell to their lowest in more than a week, adding to evidence that the hardest-hit state was controlling its spread.
The higher close on Wall Street came as President Donald Trump prepares to announce guidelines for states on reopening the country later today. Citing encouraging developments, Trump said on Wednesday that some states could reopen before current social distancing guidelines expire on May 1st. Traders will keep a close eye on Trump's new guidelines, which are likely to be announced at his daily coronavirus press briefing after the close of trading.
Shares of airline companies faltered after United Airlines Holdings CEO Oscar Munoz told employees government assistance only covered a fraction of operating expenses. United shares sank about 11.7%, while shares of American Airlines Group Inc. lost nearly 10%. Boeing Co fell 8%, as its European rival Airbus said it was examining requests to defer deliveries after a collapse in travel demand.
Banks also took a tumble, with Bank of America down 4.3%, and Wells Fargo sliding 6%. Concerns are mounting in the banking sector that, as state shutdowns look set to continue into May, households and businesses will default on billions of dollars of loans.
ECONOMIC NEWS: US Philly Fed Index Contracts Substantially In April- The Federal Reserve Bank of Philadelphia released a report on Thursday showing a substantial contraction in regional manufacturing activity in the month of April, reflecting the impact of the coronavirus pandemic. The Philly Fed said its diffusion index for current activity plunged to a negative 56.6 in April from a negative 12.7 in March, with a negative reading indicating a contraction in regional manufacturing activity. With the much bigger than expected decrease, the Philly Fed's diffusion index for current activity fell to its lowest level since July of 1980.
The steep drop by the headline index came as the new orders and shipments indexes nosedived to all-time lows during the month. The new orders index plummeted to a negative 70.9 in April from a negative 15.5 in March, while the shipments index sank to a negative 74.1 from a positive 0.2. The number of employees index also crumbled to a negative 46.7 in April from a positive 4.1 in March, hitting its lowest level since March of 2009.
US Weekly Jobless Claims Edge Lower- US Labor Department on Thursday showed first-time claims for U.S. unemployment benefits decreased in the week ended April 11th but remain at a significantly elevated level. The Labor Department said initial jobless claims dropped to 5.245 million, a decrease of 1.370 million from the previous week's revised level of 6.615 million. With the new claims filed last week, more than 22 million people have filed for unemployment since the start of the coronavirus-induced shutdown.
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