Wall Street mixed after jobless data; Amazon up, banks down

Wall Street mixed after jobless data; Amazon up, banks down
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NEW YORK — Stocks are mixed in afternoon trading on Wall Street Thursday as the relatively few winners in the coronavirus crunch pull away from the rest of the market.

The S&P 500 flipped between small gains and losses after the government reported that millions more workers lost their jobs last week. The report was universally regarded as awful, with 5.2 million more Americans filing for unemployment benefits to bring the total to roughly 22 million over the last month. But markets had braced for a number that was even more awful, which helped to limit losses for stocks.

The relatively modest moves for the overall market, though, belied more severe churning happening underneath. Gains for health care stocks, big tech companies and several retailers helped steady the S&P 500, even though losers in the index easily outnumbered the winners.

“We know the numbers are not going to be good, but companies can show they’ve taken steps to stop the cash drain or that they’ve positioned themselves well,” said Sal Bruno, chief investment officer at IndexIQ.

Amazon, Dollar General and Walmart were all close to record highs as people stock up on staples. Netflix and video-game companies Activision Blizzard and Electronic Arts are also at all-time highs as people spend more time than ever at home.

The losers in the coronavirus pandemic, meanwhile, took yet more hits. United Airlines sank 11.5% for the worst slide in the S&P 500 after its CEO told employees that demand for travel “is essentially zero and shows no sign of improving in the near term.”

As a sector, financial stocks weighed heaviest on the market as banks continued their weeklong slide. Worries are high that business-shutdown orders — and the punishing sweep of layoffs they’re causing — will force households and businesses to default on billions of dollars of loans. Bank of America lost 4.2%, and Wells Fargo slid 5.6%.

Energy companies and companies that own shopping malls were also hard hit as people stay at home amid efforts to slow the spread of the virus. Simon Property Group lost 10.7%, and Noble Energy fell 9.3%.

The S&P 500 was down 0.1%, as of 2:05 p.m. Eastern time. Treasury yields fell again and remain extremely low, which shows how pessimistic investors are about the economy’s prospects.

Markets are still unsettled following a downdraft Wednesday, when the S&P 500 fell 2.2% following reports on the economy that were worse than investors were expecting, including a record drop for U.S. retail sales last month.

Thursday’s meandering trading offered a milder microcosm of the up-and-down lurches that stocks have been cycling through in recent weeks as traders try to guess how long and how deep the upcoming recession will be.

On one hand, investors see the severe economic damage caused by the pandemic. Besides the jobless report, data released Thursday showed that homebuilders broke ground on fewer homes than expected last month. A survey of manufacturers in the mid-Atlantic region fell below the low point during the Great Recession.

On the other hand, some optimistic investors are focusing on massive aid for the economy promised by the Federal Reserve and the U.S government. They also point to recent signs that the outbreak may be levelling off in some of the world’s hardest-hit areas, which could open the path to reopening parts of the economy.

The dueling sentiments have helped the S&P 500 nearly halve its loss since falling from its record high in mid-February. Stocks were down by nearly 34% in late March, but a recent rally has trimmed the loss to roughly 18%.

Daily swings have also become milder in recent weeks. The Dow Jones Industrial Average bounced between a gain of 62 points and a loss of 288 points before sitting at 23,340 in afternoon trading, down 163 points, or 0.7%. But that’s nothing like the 2,000-point swings it was shuddering through last month.

“What that tells me is that we’re not all clear, markets can still go down, but hopefully we’ve seen the worst of the panic situation,” said Bruno.

The Nasdaq was up 0.6%, but the Russell 2000 index of small-company stocks was down 2%.

Ultimately, many professional investors say they expect the market to remain volatile until the worst of the outbreak passes.

In Europe, Germany’s DAX rose 0.2%, France’s CAC 40 slipped 0.1% and the FTSE 100 in London added 0.5%.

In Asia, Japan’s Nikkei 225 fell 1.3%. Hong Kong’s Hang Seng dropped 0.6%, and the Kospi in South Korea slipped 0.1%.

The yield on the 10-year Treasury fell to 0.60% from 0.64% late Wednesday. Yields fall when bond prices rise. Investors tend to bid up Treasurys when they’re worried about the economy.

Stan Choe And Damian J. Troise, The Associated Press

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