Wall St gains as oil recovery eclipses record weekly jobless claims

In this file photo the Wall Street street sign is seen on March 23, 2020 in New York City. — AFP pic
In this file photo the Wall Street street sign is seen on March 23, 2020 in New York City. — AFP pic

APRIL 2 — Wall Street bounced today as a recovery in oil prices outweighed the shock of weekly jobless claims soaring past 6 million.

Initial claims for unemployment benefits last week exceeded the top end of analysts’ estimates at 5.25 million, and US President Donald Trump has warned of more economic pain as more states enforce sweeping stay-at-home orders to curtail the coronavirus pandemic.

“The US labour market has never experienced such a disruption,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.

“Most will likely say the United States is sitting squarely in a recession right now, but the real question at hand is for how long and to what extent.”

The Dow Jones and S&P 500, still fresh from their worst opening quarters in history, were lifted by a surge in oil prices as Saudi Arabia and Russia signalled they were ready to co-operate to help stabilise the market.

The energy index, which has lost half its value this year partly due to their price war, jumped 13 per cent with Exxon Mobil Corp and Chevron Corp posting the biggest gains among Dow components.

But analysts predict further declines for US equity markets as more companies announce production cuts and withdraw financial forecasts ahead of the earnings season.

Boeing Co, once a symbol of American industrialism, said today it would offer buyout and early retirement packages to employees, as a near collapse in business activity crushes liquidity and sparks mass staff furloughs.

“We’re going to be digesting this for awhile and until the data becomes less worse, we’re going to have lumpiness in trading around these shock-and-awe numbers,” said Richard Steinberg, chief market strategist at Colony Group, in Florida.

At 10:13 a.m. ET, the Dow Jones Industrial Average was up 81.95 points, or 0.39 per cent, at 21,025.46, while the S&P 500 was up 17.83 points, or 0.72 per cent, at 2,488.33. The Nasdaq Composite was up 41.58 points, or 0.56 per cent, at 7,402.16.

Walgreens Boots Alliance Inc fell 6 per cent after the drugstore retailer reported a steep decline in US same-store sales in the last week of March.

Advancing issues outnumbered decliners by a 1.53-to-1 ratio on the NYSE and by a 1.80-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and seven new lows, while the Nasdaq recorded two new highs and 47 new lows. — Reuters

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