What’s happening: US stocks gained on Thursday, finishing the holiday-shortened week sharply higher.
What happened: US major indices surged last week and recovered almost half the losses suffered in late March over fears of the coronavirus impact on the economy.
Investor sentiment turned positive as the coronavirus cases curve flattening in some of the hardest-hit areas in the US and in other parts of the world, resulting in the best weekly gain since 1974 for one of the major indices.
Why it matters: The S&P 500 index roared back to life last week, to mark its best week since 1974 despite just four days of trading. Signs of a slowdown in the spread of the deadly virus was the biggest driver of last week gains. The number of daily infections in the US and other parts of the world slowed last week, with New York, the hardest-hit state in the US, posting a decline in its hospitalisation rate.
The US economy has been severely impacted by the coronavirus related shutdowns. The Labor Department reported on Thursday that more than 6.6 million people had filed for jobless benefits in the week ending April 4. Moreover, the preliminary reading of the consumer sentiment index recorded its biggest-ever single-month drop, falling to 71 in April from a previous reading of 89.1.
In a bid to kickstart the economy, the Federal Reserve disclosed another $2.3 trillion stimulus program on Thursday to support small and medium-sized businesses in the US, by providing enough liquidity in markets.
The Dow jumped 1.2% to close at 23,719 on Thursday. The S&P 500 climbed 1.5%, while the Nasdaq 100 index gained 0.8% in the previous session. For the week, the S&P 500 index spiked 12.1%, recording its strongest weekly gain since 1974. The Dow rose 12.67% in the week, while the Nasdaq 100 gained 10.59%.
Walt Disney’s shares jumped over 11% last week as the company disclosed that its Disney+ streaming service had crossed 50 million paid subscribers.
Investors were also focusing on a meeting of the major oil producers to control the declining oil prices and ending the price war between Russia and Saudi Arabia. A deal was announced by the OPEC+ group, but investors still fear the agreement will not be able to address the slump in demand caused by the coronavirus outbreak. Crude oil prices finished sharply lower on Thursday, with the WTI oil for May delivery dipping 9.3% at $22.76 a barrel.
What to watch: Investors will be waiting for the start of a brutal first-quarter earnings season. Earnings from big banks, including JPMorgan Chase, Wells Fargo, Citigroup and Bank of America, will be among the top earnings to watch this week. Wall Street analysts project the S&P 500 earnings to decline by 7.3% in the quarter. US stocks are expected to give up some of the gains posted last week, with stock futures pointing towards a lower open. No major economic releases are scheduled for release today.