Dow gains 211 points as strong earnings eclipse gloomy jobless-claims data
- US equities climbed on Thursday as positive earnings reports overshadowed dismal jobless-claims data.
- Bristol-Myers Squibb, Peloton, and Lyft all bested quarterly estimates. Moderna further lifted investor sentiments, surging to record highs after announcing that the FDA approved its coronavirus drug for a phase-two study.
- WTI crude oil climbed as much as 11%, to $26.74 per barrel, before retracing gains and trading roughly 3% lower.
- About 3.2 million Americans filed for unemployment benefits in the week ended May 2. That was down from the previous week's reading, but it brought the seven-week total to more than 33 million.
- Watch major indexes update live here.
US stocks climbed on Thursday as better-than-expected earnings reports and a short-lived oil rally drowned out bleak economic data.
Shares of Lyft, Peloton, and Bristol-Myers Squibb all surged after quarterly performances trounced analysts' estimates. Moderna stock leaped as much as 14% to a record high after it announced that the Food and Drug Administration cleared its coronavirus drug for a phase-two trial.
Here's where US indexes closed on Thursday:
- S&P 500: 2,881.19, up 1.2%
- Dow Jones industrial average: 23,875.89, up 0.9% (211 points)
- Nasdaq composite: 8,979.66, up 1.4%
The Nasdaq composite erased all year-to-date losses on Thursday, surging on the outperformance of tech giants so far in the second quarter. Facebook, Apple, Amazon, Microsoft, and Alphabet comprise 38% of the index's holdings and pushed it higher through the end of April as most firms released better-than-expected earnings reports.
West Texas Intermediate crude oil soared early in the day, trading as much as 11% higher, at $26.74 per barrel. Contracts for June delivery have more than doubled from late-April lows as global demand has slowly recovered and producers have raised official selling prices. WTI erased gains later in the day and slid roughly 3%, while international benchmark Brent crude fell about 2%.
The oil market now sits at an inflection point after weeks of turbulent trading and historically low prices, analysts at JPMorgan said Thursday. The bank forecasted demand will sharply rebound within two to three months, but also warned of longer-lasting damage from the coronavirus pandemic.
"Energy traders don't want to be caught short oil anymore and if the headlines remain positive for both the demand and supply side, prices should continue to rise," said Ed Moya, senior market analyst at OANDA.
Investor hopes were also lifted by news that US and Chinese trade officials would meet as soon as next week. Tensions between the two economic superpowers flared earlier in the week after President Donald Trump and Secretary of State Mike Pompeo suggested that the coronavirus originated in a lab in China. Chinese state media fired back, calling Pompeo "evil."
But it wasn't all good news. Jobless claims filed the week ended May 2 reached 3.2 million, the Labor Department said on Thursday. That was down from the previous reading, but it still pushed the metric's seven-week total above 33 million. The median economist estimate for weekly claims had been roughly 3 million.
The official jobs report on Friday is set to detail how hard the coronavirus outbreak has slammed the US labor market. Joblessness is expected to have reached historic highs through the month as virus lockdowns intensified and layoffs increased. Consensus economist forecasts suggest the unemployment rate could hit 16%.
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