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Stocks close higher in turnaround trade led by financials
14-May-20 16:20 ET
Dow +377.37 at 23625.34, Nasdaq +80.55 at 8943.74, S&P +32.50 at 2852.37

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[BRIEFING.COM] The S&P 500 advanced 1.2% on Thursday in a turnaround trade led by the beaten-up financials sector. The benchmark index was down as much as 1.9% in early action following a relatively disappointing weekly jobless claims report.

The Dow Jones Industrial Average increased 1.6%, and the Nasdaq Composite increased 0.9%. The Russell 2000 underperformed with a 0.4% gain.

Total jobless claims for the week ending May 9 totaled 2.981 million (Briefing.com consensus 2.475 million) while continuing claims for the week ending May 2 totaled 22.833 million. The elevated figures raised doubts on a timely economic recovery, but the data might have prodded lawmakers to act more quickly for additional fiscal stimulus.

Reports followed that the White House was interested in a bipartisan, fourth coronavirus relief bill (although not the $3 trillion bill proposed by House Democrats). The possibility for more stimulus, coupled with a view that the recent weakness in the market provided a good entry point, helped ignite a buy-the-dip mindset.

The S&P 500 financials sector (+2.6%) set the rebound pace amid strength in the bank stocks, including Wells Fargo (WFC 24.06, +1.53, +6.8%) amid speculation that it could merge with Goldman Sachs (GS 174.45, +2.65, +1.5%). The consumer staples sector (-0.3%) was the only sector without a gain today.

Sentiment might have also been boosted by an IEA report suggesting oil demand has been a little stronger than expected, The Wall Street Journal reporting that Taiwan Semi (TSM 52.10, +1.18, +2.3%) will announce plans to build an advanced chip factory in Arizona, and news that Connecticut overstated its weekly initial claims count by more than 200,000.

The IEA report likely contributed to the 8.3% gain in WTI crude futures ($27.44/bbl, +2.10). Separately, Cisco (CSCO 43.85, +1.90, +4.5%) was an earnings standout after the company issued positive quarterly results and guidance.

U.S. Treasuries finished mixed and little changed. The 2-yr yield increased one basis point to 0.16%%, while the 10-yr yield declined two basis points to 0.63%. The U.S. Dollar Index increased 0.1% to 100.31.

Reviewing Thursday's economic data, which featured the weekly jobless claims report:

Total jobless claims for the week ending May 9 were 2,981,000 (Briefing.com consensus 2.475 million). That was a decrease of 195,000 from the prior week, but still an exceedingly high number all things considered. Continuing claims for the week ending May 2 increased by 456,000 to 22.833 million, which is yet another record high.
The key takeaway from the report is that the alarmingly high level of initial and continuing claims paints a risk of a slower recovery due to weaker consumer spending activity and the rising potential that temporary job losses become permanent job losses in an elongated recovery process.
Import prices declined 2.6% in April, and prices, excluding oil, declined 0.5%. Export prices declined 3.3% in April, and prices, excluding agriculture, also declined 3.3%.

Looking ahead, investors will receive a big batch of data on Friday: Retail Sales for April, the Empire State Manufacturing Survey for May, Industrial Production and Capacity Utilization for April, Business Inventories for March, the JOLTS report for March, and Net Long-Term TIC Flows for March.

Nasdaq Composite -0.3% YTD
S&P 500 -11.7% YTD
Dow Jones Industrial Average -17.2% YTD
Russell 2000 -25.8% YTD

Market Snapshot
Dow 23625.34 +377.37 (1.62%)
Nasdaq 8943.74 +80.55 (0.91%)
SP 500 2852.37 +32.50 (1.15%)
10-yr Note +2/32 0.628
NYSE Adv 1585 Dec 1309 Vol 1.1 bln
Nasdaq Adv 1608 Dec 1653 Vol 3.9 bln

Industry Watch
Strong: Financials, Energy
Weak: Industrials, Consumer Staples, Real Estate

Moving the Market

-- Stocks stage rebound attempt led by the bank and energy stocks

-- Total jobless claims for the week ending May 9 were 2,981,000 (Briefing.com consensus 2.475 million).

-- White House reportedly interested in phase four stimulus bill

WTI crude rises 8%
14-May-20 15:30 ET
Dow +291.36 at 23539.33, Nasdaq +33.03 at 8896.22, S&P +19.90 at 2839.77

[BRIEFING.COM] The S&P 500 is trading at session highs with a 0.8% gain.

Most sectors have turned positive with the financials sector now an impressive 2.5%. The defensive-oriented real estate (-0.4%) and consumer staples (-0.2%) sectors are the lone holdouts.

WTI crude settled today's session higher by $2.10 (+8.3%) to $27.44/bbl.