Stocks Tick Higher After Big Earnings Beats–As Another 787,000 Americans File For Unemployment
Earnings on Thursday continued to surpass Wall Street expectations, but the three major indexes each ticked up less than .6% after weekly job losses only slightly recovered, though they hit their lowest levels since March highs.
The Dow Jones Industrial Average closed up nearly .6%, while the S&P 500 climbed .5%, and the tech-heavy Nasdaq ticked up .2%, marking the second day of tepid gains this week after two days of heavier losses.
Another 787,000 Americans filed initial jobless claims last week, breaking a nearly two-month streak of weekly claims above 800,000, but still much higher than pre-pandemic levels–a sign of the still-sluggish economic recovery.
Dow component Coca-Cola and telecom giant AT&T both reported earnings before the market open: Coca-Cola shares closed Thursday up 1.4% after better-than-expected net income of $1.7 billion in the quarter, down 33% from a year ago, and AT&T climbed nearly 6% on earnings that matched expectations and revenue of $42.3 billion, which beat out Wall Street estimates.
Shares of American Airlines climbed 3% despite another big quarterly loss–of $2.4 billion–thanks in part to the firm cutting its cash burn rate; the Texas-based airline also announced a $1 billion stock offering.
Global markets were also tepid on Thursday: The United Kingdom’s FTSE 100 ended the day up .2%, while France’s CAC 40 was virtually flat, and Japan’s Nikkei 225 ended the day down .7%.
Federal Reserve Governor Lael Brainard–who former Vice President Joe Biden might be eyeing as a potential Treasury Secretary pick–warned Wednesday that the lack of more fiscal stimulus could further slow down–and perhaps even reverse–an already sluggish economic recovery, pointing to disparities akin to the continued job losses despite better-than-expected corporate earnings reported on Thursday. “The recovery remains highly uncertain and highly uneven—with certain sectors and groups experiencing substantial hardship. These disparities risk holding back the recovery,” the central bank official said. “Further targeted fiscal support will be needed alongside accommodative monetary policy to turn this K-shaped recovery into a broad-based and inclusive recovery.”
53% of Americans think the economic situation is going to get worse before it gets better, says James Knightley, the chief international economist of Dutch bank ING, which polled 14,000 European and American respondents about their economic outlook amid the pandemic and released the findings on Tuesday. The survey found Europeans were generally less optimistic, with 65% of Britains, 78% of Spaniards, 68% of Italians and 63% of French people saying their domestic economies would get worse before getting better.
Weekly Unemployment Claims Fall Below 800,000 For The First Time In Months (Forbes)
72% Surge In New Covid Cases Is Slowing Economic Recovery, BoA Says (Forbes)
Tesla Stays In The Black For A Fifth Quarter, Buoyed By Emissions Credit Sales (Forbes)
Stocks Fail To Nab Gains, Dow Flat, As Fed Governor Says Targeted Stimulus ‘Needed’ For ‘Inclusive’ Economic Recovery (Forbes)