Thursday July 23rd


Dow futures turn negative after worse-than-expected jobless claims

U.S. stock index futures turned lower Thursday morning as the weekly jobless claims data disappointed investors. Dow Jones Industrial Average futures dipped about 20 points, implying a opening loss of 30 points. S&P 500 futures were flat, while Nasdaq-100 futures were up slightly. U.S. weekly jobless claims came in at 1.416 million for last week, marking the 18th straight week in which initial claims rose by more than 1 million. Economists expect another 1.3 million workers to have filed initial claims for state unemployment benefits, according to Dow Jones. Wall Street’s attention in premarket trading was also on earnings announcements from several U.S. companies, but especially Microsoft and carmaker Tesla. Despite better-than-expected figures, software giant Microsoft shares fell as much as 3% in after-hours trading. Though the company’s results were largely positive, Microsoft said its transactional license purchasing continued to slow and that subsidiary LinkedIn was negatively impacted by the weak job market. Tesla, meanwhile, blew past analyst expectations and posted its fourth consecutive quarter of profit, opening the door for the company’s inclusion in the S&P 500.  Excluding one-time charges, Tesla’s second-quarter earnings per share of $2.18 were well above the 3 cents per share expected by analysts polled by Refinitiv. Elon Musk’s automaker also said it’s set “for a successful second half” and reiterated its goal of delivering 500,000 vehicles this year. The moves followed a positive regular session on Wednesday, with the major indexes all posting modest gains on both vaccine and federal stimulus announcements. The Dow Jones Industrial Average finished the day up 165.44 points, or 0.6%, with McDonald’s and Microsoft contributing the most to the index. The S&P 500 also rose about 0.6% as utilities and real estate investment trusts led the broader market higher. The Nasdaq Composite, meanwhile, rose 0.2%. The three indexes are up 1.25%, 1.59% and 1.9%, respectively, for the week. Equities caught a morning bid after the U.S. agreed to pay drugmaker Pfizer and German partner BioNTech nearly $2 billion for 100 million coronavirus vaccines if their candidate proves both safe and effective. U.S. stocks also rallied toward the end of the regular session on Wednesday after sources told CNBC that congressional Republicans are weighing an extension of watered-down federal unemployment benefits through the end of the year. Asia Pacific markets traded mixed on Thursday with Chinese mainland shares declining and South Korea reporting a decline in second-quarter GDP, largely due to a steep fall in exports. South Korea’s Kospi index fell 0.56% to 2,216.19. Hong Kong’s Hang Seng index rose 0.54% in late-afternoon trade and India’s Nifty 50 added 0.64%. Chinese mainland markets were lower: The Shanghai composite fell 0.24% to 3,325.11, the Shenzhen component and the Shenzhen composite closed near flat. Markets in Japan are closed for a public holiday. Oil prices moved lower on Thursday after a surprise increase in U.S. crude oil reserves as the coronavirus pandemic hit fuel consumption weighed on prices. U.S. crude and distillate inventories rose unexpectedly and fuel demand slipped in the most recent week, the Energy Information Administration said on Wednesday, as a sharp rise in coronavirus cases has started to hit U.S. consumption. Brent crude fell 20 cents, or 0.45%, to trade at $44.09 per barrel, while West Texas Intermediate crude traded 13 cents, or 0.31%, lower at $41.77 per barrel. Prices  have been marking time since hitting a four-month high earlier in the week on hopeful news about a coronavirus vaccine. Gold extended its rally into a fifth session on Thursday, hitting a nine-year high as escalating U.S.-China tensions increased its safe-haven appeal. Spot gold was 0.6% higher at $1,882.17 per ounce, having hit its highest since September 2011 at $1,888.26. U.S. gold futures rose 0.9% to $1,881.50.