The S&P 500 and Nasdaq Composite rose in volatile trading as Amazon and Netflix reached record levels, while investors digested more data reflecting the economic devastation from the coronavirus pandemic.
Around 11 a.m., the S&P 500 was up 0.4%. The tech-heavy Nasdaq jumped 1.4% while Amazon and Netflix both gained more than 4%. The Dow Jones Industrial Average lagged the other averages, slipping 22 points, or 0.1%.(Click here for the latest market news.)
The Nasdaq 100, which is made up of the 100 largest companies in the composite, erased all of its year-to-date losses.
Netflix got a boost after a Goldman Sachs analyst hiked his price target on the stock to $490 per share from $430 per share. The analyst also said the streaming giant will blow earnings estimates out of the water.
Thursday’s gains put Netflix up more than 37% year to date and Amazon up 30% for 2020.
More bad economic data
The Labor Department said 5.245 million Americans filed for unemployment benefits in the week of April 11. Last week’s claims total brought the number of job losses to 22 million during the coronavirus outbreak.
However, Grant Thornton Chief Economist Diane Swonk pointed out the pace of weekly claims declined last week.
“It’s not exactly good news when the pain is compounding but it should be peaking,” Swonk said. “We are going to be disbursing 1.3 million plus small business loans. They have to start using that money within 10 days, which means we’ll people brought back on the payrolls in May and June.”
The Philadelphia Federal Reserve’s business conditions index hit its lowest level since July 1980 as activity in the region slumped this month. U.S. housing starts plunged 22.3% in March.
Thursday’s moves followed a slump during regular trading on Wednesday as gloomy economic data and anemic bank earnings fueled concerns over the coronavirus’s impact on the U.S. economy.
The Dow and Nasdaq both fell more than 1% on Wednesday while the S&P 500 lost 2.2% on the back of disappointing retail sales data.
Despite the recent dismal economic data, some market strategists pointed to a slowdown in the daily number of new U.S. coronavirus cases and the flattening in the net number of hospitalizations in New York state as evidence that markets may trend upward in the coming weeks.
JPMorgan’s Marko Kolanovic said Wednesday evening that such improvements in health-care data could encourage state governments to take “baby steps” to reopen certain economies as soon as next week.
Kolanovic, the global head of quantitative and derivatives strategy at JPMorgan, reiterated his forecast that the U.S. equity market could reach new all-time highs as soon as the first half of 2021 if the economy is set to recover later that year.
Better health-care figures mean “we think it’s gonna be possible to reopen it sooner. We think within a week from now, you will start seeing some limited moves,” he told CNBC’s “Fast Money.”
“It’s going to be limited: I’m talking baby steps,” he added. “But that tells us that by the summertime, we may more substantially recover. And sometime next year — maybe the second half of next year — the economy reaches the high watermark. Which means that the market could reach a high watermark in the first half of next year.”
The Dow and S&P 500 remain more than 20% and 17.9% below their respective all-time highs set in February as marketplace jitters over the spread of the novel coronavirus and an uncertain vaccine timeline foster volatile trading on Wall Street.
Eager to restart significant portions of U.S. commerce, President Donald Trump again advocated for a gradual reopening of the economy during a press conference Wednesday evening.
The president said that there are also public health costs the result of keeping state economies closed. Lost income and benefit coverage, the president said, can also lead to significant and negative health outcomes.
“There has to be a balance. You know, there’s also death involved in keeping [the economy] closed,” Trump said from the White House. “We have to get back to work.”
“With all of that being said, we’re going to start with states and with governors that have done a great job. And they’re going to open it up as they see fit,” he said.
Click here for the latest news on the coronavirus.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
