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Dow falls 340 points as post-coronavirus unemployment filings exceed 30 million

Apr 30, 2020, 20:07 IST
Business Insider
Bryan R Smith
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US stocks fell Thursday after jobless claims data showed another 3.8 million Americans filed for unemployment last week. In just six weeks, more than 30 million Americans have filed a claim for UI benefits.

"We may be past the peak of initial claims, but we aren't out of the woods yet," Daniel Zhao, senior economist at Glassdoor, told Business Insider.

Here's where major US indexes stood shortly after the 9:30 a.m. market open Thursday:

Read more: A fund manager who's beating the market by betting on tiny companies says coronavirus 'turbocharged' the trends driving his portfolio. He told us what they are, and the 3 stocks he's most bullish on.

The US government also reported Thursday that consumer spending slumped in March as businesses closed, laying off workers. Consumption is roughly 70% of US gross domestic product, making it an important drive of the economy.

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On Wednesday, the GDP report showed the US economy contracted at a 4.8% annualized rate in the first quarter. Economists expect that there is worse to come, forecasting that GDP could fall as much as 40% in the second quarter.

The negative news dialed back some optimism from earlier in the week. Federal Reserve Chairman Jerome Powell on Wednesday said that the central bank is ready to continue to provide stimulus support amid the coronavirus pandemic. The central bank also left interest rates unchanged.

Read more: An investment chief who oversees $29 billion explains why he's bullish on a niche industry that's 'like the red blood cell of tech' — and shares 2 stocks he's buying

In addition, Gilead Sciences on Wednesday announced that it had seen positive results from its antiviral drug, remdesivir, in a critical Covid-19 study. Later in the day, Dr. Anthony Fauci, the nation's top expert on infectious disease, said the early results offered good news.

"Any positive news towards finding a treatment or a vaccine to Covid-19 is driving risk-on behaviour," Hussein Sayed, chief market strategist at FXTM, told Business Insider. "The other factor feeding appetite to riskier assets is the gradual lifting of lockdowns that we've seen in several US states and European countries."

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Investors also still have a close eye on first-quarter earnings season. Shares of Facebook surged 7% early Thursday following solid ad revenue. Tesla shares rose 8% after the company managed to turn a profit for the third quarter in a row.

Shares of Twitter fell 7% on its quarterly earnings that showed a drop in advertising revenue. Today, blue-chip companies including Amazon, Gilead Sciences, Visa, and United will report earnings after market close.

Oil prices gained Thursday on early signals of a global demand recovery. WTI crude climbed as much as 18%, to $17.80 per barrel. International benchmark Brent crude rose 13% at intraday highs, to $25.43 per barrel.

Read more: A former software engineer quit a 6-figure job and started investing in real estate full-time. He shares the popular 5-part strategy he's leveraging and exactly what he looks for in a deal.

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