US stocks may be in focus today, as investors await earnings reports from various companies and economic data from the country.
Context: US stocks closed lower on Wednesday following disappointing earnings reports and economic data due to the coronavirus pandemic. Despite European and US governments considering plans to relax some of the coronavirus-related restrictions, investors focused on the dismal corporate earnings reports highlighting a massive impact of the pandemic on business.
Details: After rising over 550 points on Tuesday, the Dow gave up gains and fell around 450 points in the last trading session. Major banking stocks reported huge declines in their profits after taking charges for credit write-offs.
Energy and material-related stocks tumbled the most in the S&P 500 index, as crude oil prices settled below $19 per barrel on Wednesday, after the IEA (International Energy Agency) warned of a record drop in oil demand.
The Dow dipped 445.41 points to close at 23,504.35 on Wednesday. The Nasdaq 100 was down 1.4% at 8,393.18, while the S&P 500 declined 2.2% to settle at 2,783.36.
Recent economic reports pointed towards serious economic challenges from the coronavirus outbreak. US retail sales declined 8.7% in March, worse than the already dismal projection of a 7.1% drop. Industrial production was also down by 5.4% in March. The New York Empire State Index tumbled to a record low reading of -78.2 for April.
Citigroup’s shares tumbled 5% after the bank reported a 46% decline in its first-quarter profits. Goldman Sachs reported downbeat quarterly earnings, while sales topped views. This was the same for Bank of America. However, UnitedHealth Group’s stock bucked the market trend, gaining over 4% after the company reported stronger-than-expected quarterly results.
Investors continue to monitor daily coronavirus numbers, with the total number of cases surpassing 2,065,900 globally. The number of positive cases in the US has exceeded 639,660 with around 30,980 deaths.
In other news, WTI crude for May delivery dipped 1.2% to settle at $19.87 per barrel, while June gold rose 1.6% to settle at $1,740.20 an ounce.
What to watch: Investors will continue to focus on earnings reports from major companies including Morgan Stanley, Abbott Laboratories and Intuitive Surgical. US stocks are expected to rebound slightly today, with stock futures pointing towards a higher start.
Investors also await a basket of economic reports from the country, including initial jobless claims, housing starts, building permits and Philadelphia Fed manufacturing index. Analysts expect initial jobless claims to total 5.105 million in the latest week. The Philadelphia Fed Manufacturing Index, which declined to -12.7 in March, is expected to drop further to a reading of -30 in April. Housing starts and building permits are likely to decline to an annualised rate of 1.3 million each in March.
Other Markets: European indices were trading higher at 9:00a.m. GMT, with the FTSE 100, German 30 and French 40 up by 0.3%, 1.3% and 1.2%, respectively.