US equities have lost ground on Thursday, after rallying for two days on optimism around Moderna’s vaccine. The S&P 500 (-0.34%) has been dragged down by Apple and Microsoft, among others, as the higher-than-expected number of jobless claims reflected the economic damage from rising COVID cases.
The US Labor Department said that the number of initial unemployment benefits dropped by 10,000 to 1.310 million in the previous week, while analysts anticipated a decline to 1.25 million.
On the positive side, US retail sales beat expectations in June – up 7.5% vs. expected 5.0%. However, Thursday’s record increase in coronavirus cases is hindering the recovery. California and other states have been forced to introduce strict lockdown measures again.
Dow Jones fell 0.50%, and Nasdaq dropped by 0.73%. The S&P and Dow are still slightly higher than Monday levels, unlike Nasdaq.
Asian stocks are mixed, with some markets ending the week on a high note. Investors are pricing in the expectations of more stimulus from governments around the world. In the US, some existing stimulus programmes are about to expire at the end of July, and investors hope that policymakers would green-light more support schemes. The US Congress is set to discuss the new measures next week.
At the time of writing, Hong Kong’s Hang Seng Index is up 0.59%. Japan’s Nikkei 225 is down 0.29%, while South Korea’s KOSPI has gained 0.69%.
China’s indices turned bearish after initial gains. The Shanghai Composite is down 0.51%, and the Shenzhen Component has dropped 0.25% after surging over 2%. Investors are monitoring the worsening tensions between the US and China. Washington is seriously considering to ban all members of China’s Communist Party and their families from entering the US.
The ASX 200 is down 0.10%, after earlier gains. Melbourne saw a record increase in COVID cases even though it reimposed strict lockdown measures last week.
European equities will open higher as FTSE and DAX futures are flashing green.
In individual corporate news, Morgan Stanley’s share price added 2.5% after the banking giant reported record quarterly profits. The bank’s trading unit saw a 68% surge in revenue, driven by a 168% increase in bond trading. Elsewhere, Bank of America dropped 2.7% after reporting a nearly 50% drop in second-quarter profit.
Twitter fell 1.1% after probably the greatest hacking attack that it had ever experienced. Con artists hacked into the accounts of top politicians, celebrities, billionaires, and companies – including Barack Obama, Joe Biden, Bill Gates, Warren Buffett, Jeff Bezos, and Elon Musk – to solicit Bitcoin.
In after-hours trading, Netflix tumbled about 10% after the streaming video service reported slower subscriber growth than expected.
American Airlines dropped over 7% after sending about 25,000 notices of potential furloughs to employees and warning that demand for air travel is braking again.
