Stocks fell on Thursday, the last day of April, as investors digested another round of dismal economic data along with the latest batch of major tech earnings.
The Labor Department said another 3.84 million Americans filed for unemployment benefits last week, bringing the six-week total to more than 30 million. U.S. consumer spending also dropped 7.5% in March on a year-over-year basis.
The sharp rise in jobless claims and the precipitous drop in consumer spending come as businesses are forced to shut down and consumers stay home amid the coronavirus pandemic.
Stocks were also under pressure after the European Central Bank said it was prepared to increase its emergency asset purchase program. Some traders were hoping the ECB would announce an increase Thursday.
Wall Street came into Thursday’s session on pace for one of its best monthly performances in decades. The S&P 500 was up more than 12% for the month and on track for its biggest one-month gain since 1987. The Dow was up 10.5% in April, which would be its best month since 2002.
Those sharp gains have been driven by hopes of a potential coronavirus treatment.
Gilead Sciences said Wednesday a study from the National Institute of Allergy and Infectious Diseases met its primary end point. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said remdesivir shows a “clear-cut” positive effect when treating the virus.
But even under an optimistic scenario, “we would still expect genuine distress in pockets of the economy which either came into the crisis with a poor supply/demand imbalance or is likely to see the latter radically disrupted (a good portion of commercial real estate unfortunately ticks both boxes),” Michael Shaoul, chairman and CEO of Marketfield Asset Management, said in a note.
Big tech shares bucked the negative trend in the market after Facebook and Microsoft reported promising revenue figures despite the global coronavirus outbreak.
Facebook jumped more than 4% after it reported that, after an initial “significant” pullback in advertising revenues in March thanks to Covid-19, it’s seen sales stabilize in the first three weeks of April. It reported first-quarter per-share earnings of $1.71 and revenues of $17.74 billion.
Microsoft rose about 0.1% after the company reported fiscal third-quarter sales growth of 15% thanks to growth in its cloud business. The software giant said in a statement that the disease “had minimal net impact on the total company revenue” in the three months ended March 31, but cautioned that “effects of COVID-19 may not be fully reflected in the financial results until future periods.”
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