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US stocks closed higher on Thursday, eking out steady gains in the afternoon following a morning of volatile trading.
The Dow swung more than 1,200 points from its low to its high point. It finished up nearly 1%, or 188 points. It was the first time since March 6 that the index closed within 1,000 points from where it opened.
The S&P 500 closed up 0.5%, also by far its most modest finish since the start of the month.
The Nasdaq Composite, which was the best performer of the day, ended up 2.3%.
In a matter of days, mass numbers of workers, students and businesses have increased their use of the internet to work, communicate and stay entertained as coronavirus spreads. Netflix said Thursday it will reduce streaming quality in Europe to keep the internet from collapsing under the strain of unprecedented usage.
But Verizon CEO Hans Vestberg said he’s not concerned about the US network’s ability to handle the traffic.
“So far (we’re seeing) no congestion in the network, we can handle that, we have built a very robust network,” Vestberg told CNN’s Richard Quest Thursday.
The company has noted a shift in the types of applications relying on the network: gaming is up 75% from the prior week, web traffic is up 20%, VPN usage is up 30% and streaming is up 10%.
In less than one week, 100,000 of Verizon’s 135,000 global employees have shifted to remote working arrangements, but Vestberg said the company remains focused on network up-keep.
“We still have field engineers in the market keeping the network up … We need to keep these networks up because they are so important in this critical moment and this crisis right now,” he said.
This is how insane the oil market is right now: US oil prices spiked by 24% on Thursday, marking a record one-day percentage gain. Yet even that massive rally wasn’t enough to recover the $6.58-per-barrel that crude lost only the day before.
Still, the spike might raise hopes that the energy market could be finding a bottom after an historic collapse. Crude settled at an 18-year low on Wednesday in response to shrinking demand and surging supply.
“The whipsaw oil price action continues at an unprecedented and violent pace,” said Michael Tran, managing director of global energy strategy at RBC Capital Markets.
Analysts said there wasn’t a clear catalyst for the rebound and instead pointed to oversold conditions and volatility across financial markets.
The gains outstripped the 15% spike last September after Saudi Arabia’s oil production suffered a devastating attack.
Oil stocks, which have been crushed by the oil crash, rallied sharply on Thursday.
Noble Energy (NBL), Diamondback Energy (FANG) and Devon Energy (DVN) all climbed more than 15% apiece.
American Airlines (AAL) is the latest airline to take drastic measures in light of the ongoing coronavirus pandemic that’s ravaging the industry.
The Dallas-based carrier is grounding 450 planes, which is nearly half its fleet. It’s also drawing back its expansive domestic and international schedules by eliminating 55,000 flights.
President Robert Isom shared the news in an internal email obtained by CNN, in which he said he expects “demand to fall even more before it gets better.” He also said the airline is reducing its May schedule even further than April’s planned cuts.
The airline also said it is continuing efforts to reduce the number of employees it pays, by expanding voluntary leave programs and “offering an early out” to employees with at least 15 years of service.
The note did not disclose any furloughs or layoffs, and the airline has declined to comment on whether it is considering such cuts.
American has also taken out a $1 billion loan to “strengthen” its balance sheet, according to the email.
The airline’s stock is down another 10% Thursday and is down a whopping 64% for the year.
All three major US stock indexes are in the green in the early afternoon following a volatile morning.
The S&P 500 – Wall Street’s broadest measure – is up 1%, led by gains in the energy sector – which is benefiting from a rebound in oil prices – as well as consumer and tech industries.
The Dow is up 1.2%, or 225 points, and the Nasdaq Composite is up 3.1%, having been the best performer all day.
The National Retail Federation sent a letter to President Donald Trump Thursday asking for clarification on which stores can remain open.
“There remains a need for clear national guidance to resolve questions caused by a number of conflicting state and local orders that are triggering consumer, worker and business confusion, leading to cascading negative impacts on communities across the country.”
President Donald Trump announced Thursday that he spoke with the Carnival Cruise (CCL) chairman Mickey Arison, who has said he will make some ships from his fleet available to complement the work of US Navy hospital ships.
“This morning, I spoke with Mickey Arison of Carnival Cruise Lines and he’s going to make ships available. So in addition to the big medical ships that you have coming, if we need ships with lots of rooms, they’ll be docked at New York and Los Angeles and San Francisco, different places,” he said.
The Trump administration has outlined a massive $1 trillion economic relief program to ready the United States for the fallout from the coronavirus outbreak.
And that’s the good news. The worrying part: It will add significantly to America’s already large debt burden, according to analysts at ratings agency Moody’s.
Last year, the nation’s fiscal deficit grew to 4.6% of GDP, with the national debt at 79% of GDP. That’s the highest debt level since 1948. Not an optimal starting point for a shock to the economy.
Both the fiscal deficit and the overall national debt burden are expected to increase, with the fiscal deficit potentially climbing to levels not seen since 2008, at the start of the Great Recession, the Moody’s analysts said. A fiscal deficit is the shortfall in a government’s income compared with its spending.
“We previously projected that adverse fiscal dynamics would increase the deficit to around 6.3% of GDP by 2029, but the coronavirus pandemic introduces significant downside risk to our medium-term fiscal outlook,” the analysts said.
If the measures succeed in preventing a worse economic outcome, higher GDP growth in the future could mitigate America’s rising debt burden.
Interest in home buying has decreased because of the coronavirus pandemic, the National Association of Realtors said. People aren’t thinking about moving while they’re working from home and engaging in social distancing.
Nearly half of surveyed realtors saw a drop in buyer interest.
“The decline in confidence related to the direction of the economy coupled with the unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” said NAR Chief Economist Lawrence Yun.
That said, home buying should rebound strongly after the quarantine-like measures are lifted, Yun said.
Home prices should hold steady for now because America is facing a housing shortage anyway. That’s good news if you’re looking to sell.
Central banks around the world continue to intervene with everything in their toolbox to get their economies ready to weather the coronavirus storm.
The Bank of England slashed interest rates to 0.1% in an emergency meeting today and increased its bond buying program.
This is the BOE’s second rate cut this month as the economic fallout from the coronavirus pandemic is becoming more palpable around the world.
The bank will purchase £200 billion more British government and corporate bonds, bringing its total holdings to £645 billion.
Domino’s Pizza is looking to hire up to 10,000 workers as people shift their eating habits to takeout or delivery amid restrictions surrounding the growing coronavirus pandemic.
The pizza chain is looking to hire for several positions in its stores and factories, including chefs, customer service representatives and managers.
Domino’s (DPZ) stock is one of the few bright spots in the volatile stock market. Shares are up 10% Thursday and have climbed more than 7% this year.
Stocks are giving investors whiplash today. They’ve swung from up, to down, to mixed in just over an hour of trading so far. Most recently the Dow and S&P 500 had turned red again, albeit just modestly so, while the Nasdaq Composite remains sharply higher.
But what’s going on in other asset classes?
US Treasury yields are slightly lower today, but the 10-year bond yield remains above 1%.
Just last week, the yield fell to its lowest level ever at 0.3%. The subsequent yield rally over just a few days can be attributed to investors selling their safe-haven Treasuries for cash. Bond prices and yields move in opposite direction to each other.
In the foreign exchange market the dollar continues to be king as investors and businesses are trying to shore up their dollar reserves. The ICE US Dollar Index is up 0.6% today, and has rallied nearly 4% in the month so far.
Gold is currently at $1,483.90 per ounce, and US oil prices are hovering around $23 a barrel. As a result of the oil price drop gasoline prices are below $2 per gallon in 12 states.
The New York Federal Reserve continues to point a firehose of liquidity at clogged-up financial markets.
The NY Fed just announced it will purchase another $10 billion of mortgage-backed securities (MBS) on Thursday via two separate operations.
The cash injections, according to the NY Fed, are aimed at tackling “highly unusual disruptions” in the mortgage bond market linked to the coronavirus outbreak.
The $10 billion is part of the $200 billion in mortgage bonds the Fed promised on Sunday to buy as it relaunched quantitative easing, or QE.
And this is on top of the flurry of overnight repo operations that are aimed at unclogging short-term funding markets.
And the NY Fed made clear its MBS may only be beginning.
The statement said the NY Fed “stands ready” to buy even more mortgage bonds if it’s needed to keep markets operating smoothly.
In less than one hour of trading, we’ve already seen it all. After a mixed open, all three major US stock indexes fell into negative territory … then pared their losses … and are now in the green.
I dare you to keep up with this market today.
The Dow was last up 0.5%, or nearly 100 points. The S&P 500, the market’s broadest measure, was up 0.8%. Consumer and tech stocks are leading the gains.
The tech-heavy Nasdaq Composite rose 2.7%.
Stocks are all over the place this morning, but on the whole it’s looking less dire than on previous days.
The Nasdaq Composite, which opened in the green, pared its modest gains, just to turn positive within a matter of minutes. The index was last up 0.9%.
The S&P 500 and the Dow have both remained in negative territory since the opening bell rang about half an hour ago. But the two benchmarks also first extended and then retraced their losses.
As of around 10 am ET, the Dow was 1.3%, or 250 points, lower, while the S&P fell 0.8%.
Let’s see how long this lasts.
The Energy Department promised Thursday to support US oil producers facing “potentially catastrophic losses” by quickly purchasing 30 million barrels of crude.
Those barrels, purchased at dirt-cheap prices, will be used to start filling up America’s emergency oil stockpile, known as the Strategic Petroleum Reserve, or SPR.
The initial purchase will be focused on small and midsize US oil producers, the group most at risk from the oil crash to $20 a barrel.
Treasury Secretary Steve Mnuchin said he will recommend to President Trump that he request funding from Congress to buy even more crude – enough to fill up the SPR.
“At $22 for WTI crude, we should be filling up the reserve for the next 10 years,” Mnuchin said on Fox Business Thursday morning.
Mnuchin said the oil market has “nothing to do with the coronavirus, other than there’s just a lot less demand.”
That’s not exactly right. The demand destruction, caused by mass cancellations of flights and widespread factory shutdowns, is a major driver of the oil crash.
The other huge problem: Saudi Arabia and Russia are flooding the market with too much supply in a bid to crowd out high-cost US producers.
US stocks fell further in the first half hour of trading, sliding sharply after a much less dramatic open.
The Dow is now down 580 points, or 2.9%, while the S&P 500 has fallen 2.5%.
The Nasdaq Composite, which was in the green at the opening bell, is down 1%.
Ford announced it is offering customers no payments for six months on new car purchases in the face of the coronavirus crisis.
Ford said that under its “Built to Lend a Hand” program it will make three months of car payments for eligible new car buyers and that buyers can defer up to three additional months of payments when financing through Ford Credit.
Ford also announced it is suspending payments of its dividend, and that it will draw down $15.4 billion in cash it had available on two separate lines of credits to give it sufficient cash on hand heading into an economic downturn.
Early indications are that US automakers have ground to a halt in the face of crisis, although firm numbers have yet to be reported. Ford, General Motors and Fiat Chrysler all are shutting production at North American auto plants through the rest of the month to protect workers and because of supply chain issues. But the lack of sales means the shutdown likely won’t cause a vehicle shortage at dealerships.
US stocks opened mostly in the red on Thursday, adding on to yesterday’s losses, as more and more corporations are coming out with revised performance outlooks amid the coronavirus crisis.
That said, Thursday’s selloff is looking a little less dramatic compared to previous days. Trading was halted on both Monday and Wednesday this week after the S&P tripped a circuit breaker.
Both indexes extended their losses in the first moments of trading, with the S&P falling as much as 1.9% and the Dow dropping 2.4%.
