U.S. Stocks Sink on Economic Outlook; Oil Jumps: Markets Wrap

NEW YORK (Capital Markets in Africa) — U.S. and European stocks slumped amid dire economic warnings, more dismal data and corporate results that showed the coronavirus’s toll on businesses. Oil extended a rebound after an early-week tumble.

Banks led the S&P 500 Index lower as the latest U.S. unemployment figures showed a larger-than-expected jump in new benefit claims and European Central Bank President Christine Lagarde said the euro-area economy could shrink 12% this year. The Stoxx Europe 600 Index gave up an early advance to trade lower amid a barrage of bad economic readings. Strong results from Microsoft Corp., Facebook Inc. and Tesla Inc. limited losses on the tech-heavy Nasdaq gauges.

Most European bonds maintained gains as the ECB intensified its response to the coronavirus crisis while leaving its main borrowing rate unchanged. Treasuries edged higher. Crude futures jumped for a second day on signs fuel consumption is starting to recover in the world’s biggest economies.

Imperial College London Professor of Infectious Disease Dynamics Steven Riley discusses priorities in the battle against the coronavirus pandemic.

Investors continue to weigh a brutal economic picture against hopes for a coronavirus treatment and an eventual end to lockdown measures across the world. The U.S. government’s top infectious-disease expert, Anthony Fauci, said early results from a Gilead drug trial offered “quite good news,” while earnings reports from tech giants show some parts of the economy have remained resilient.

“It’s encouraging you’re seeing big tech earnings come in strong, but there are still challenges,” said Brian Price, head of investment management for Commonwealth Financial Network.“There’s going to be a push-pull in the market for the foreseeable future.”

Elsewhere, Japanese and Chinese equities rose over 1% as their Australian peers jumped more than 2%. Hong Kong and South Korea were shut for a holiday. Emerging-market stocks jumped.
These are the main moves in markets:

Stocks
Futures on the S&P 500 Index dropped 0.7% as of 9:31 a.m. New York time.
The Stoxx Europe 600 Index decreased by 1%.
The MSCI Asia Pacific Index rose 1.2%.
The MSCI Emerging Market Index gained 0.9%.
Currencies
The Bloomberg Dollar Spot Index rose by 0.2%.
The euro fell 0.3% to $1.0846.
The British pound rose 0.1% to $1.2484.
The Japanese yen was little changed at 106.66 per dollar.
Bonds
The yield on 10-year Treasuries fell three basis points to 0.60%.
Germany’s 10-year yield sank six basis points to -0.56%.
Britain’s 10-year yield declined three basis points to 0.25%.
Commodities
West Texas Intermediate crude gained 12% to $16.88 a barrel.
Gold weakened 0.5% to $1,704.22 an ounce.

Source: Bloomberg Business News