Investors Barrel Ahead Against Record Job Losses Brought by Pandemic

While construction continued in the above image, taken last month at a housing plan in Zelienople, Pa., new figures from the Commerce Department show that spending on U.S. construction projects fell 1.3% in February. (AP Photo/Keith Srakocic)

BOSTON (CN) — Stocks ended in the black Thursday after a choppy session that began with news that the 22 million jobs lost in the last four weeks had largely wiped out all the employment gains since the Great Recession.

The Dow Jones Industrial Average was up 33.33 points, or 0.14%. The S&P 500 increased 16.19 points, or .58%. The Nasdaq was up 139.19, or 1.66%. Both Netflix and Amazon hit all-time highs.

Some 5.245 million new unemployment claims were filed in the second week of April, the government said, slightly higher than the 5 million most analysts were expecting. 

The number was the second straight weekly decline and a drop of more than 1.3 million from the previous week, suggesting that the surge in coronavirus-related job losses may have peaked.

Still, the raw numbers are staggering. The highest one-week total on record prior to the pandemic was 695,000, back in October 1982.

Other coronavirus news weighed on the market. New York Governor Andrew Cuomo announced that he and other East Coast governors planned to continue their shutdowns of nonessential businesses through May 15.

“What happens after then? I don’t know. We will see what the data shows,” Cuomo said in a press conference.

And the Small Business Administration announced that its rescue loan program had hit its limit of $349 billion and was unable to accept any additional loan applications.

Senate Democrats and Republicans were unable to come to an agreement last week over a plan to increase funding for the Paycheck Protection Program by a further $250 billion, but talks are said to be ongoing.

Some experts were pessimistic about the recovery. Morgan Stanley CEO James Gorman predicted that the U.S. would remain in a slump through the end of 2021. “I would say through the end of next year, we’re going to be working through the global recession,” he told CNBC. 

“The economy is under distress in ways we’ve not experienced in our lifetimes,” said New York Fed President John Williams in a webinar.

“We are running more open market operations, for greater sums, than at any time in our history,” he said, adding “our work is not done.” 

Meanwhile the Commerce Department reported that housing starts in March fell 22.3% from the previous month, with a seasonally adjusted annual rate of about 1.2 million units, down from 1.56 million in February. Construction of single-family houses fell 17.5%, while apartments and condominiums were off by 32.1%. 

Fannie Mae predicted Wednesday that 2020 home sales would be down 15%.

The Philadelphia Federal Reserve Bank announced that its Manufacturing Business Outlook Survey registered -56.6 in April, down from -12.5 in March. Any number below zero indicates worsening conditions. The April number was the worst since July 1980. 

Earnings reports were mixed. Morgan Stanley reported revenues of $9.5 billion, down about 8% from the same period last year, and income of $2.1 billion, down 27%. The results missed analysts’ expectations and the firm warned of more trouble to come, saying future earnings would reflect “many of the same negative impacts and without the potential benefit of higher client trading activity experienced in the first quarter.” 

Bank of New York Mellon reported first-quarter revenue of $4.1 billion, up 5%, and earnings of $944 million, up 4%. 

Abbott Labs saw revenues rise 2.5% to $7.7 billion and earnings up 3.2% to 65 cents per share. But the company also said that investors should no longer rely on its previous guidance for the 2020 fiscal year “due to uncertainties regarding the duration and impact of the coronavirus pandemic.” It had previously projected earnings of $3.55 to $3.65 per share. 

Abbott has a new antibody test that indicates whether a person had Covid-19 in the past and is asymptomatic or recovered. The company plans to ship 4 million tests this month and 20 million per month starting in June, CEO Robert Ford said in a conference call with investors. 

BlackRock’s revenue beat expectations: The firm reported inflows of $3.7 billion, up 11%. But the firm’s diluted earnings per share of $5.15 were below what analysts were predicting. 

The results were affected by the firm’s contribution of $539 million to a charitable foundation in February.

European markets ended the day mixed to slightly positive.

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