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Stocks make modest recovery despite virus worries

Disneyland in California was due to open on July 17, 2020 but has said its gates will now stay closed owing to the virus resurgence, without naming a new date (AFP Photo/DAVID MCNEW)
Disneyland in California was due to open on July 17, 2020 but has said its gates will now stay closed owing to the virus resurgence, without naming a new date (AFP Photo/DAVID MCNEW)


European and Wall Street stocks advanced Thursday, partially recovering losses from the prior session’s pullback despite surging coronavirus cases in several US states and a warning from the WHO about an uptick in cases in parts of Europe.

Oil also recovered some of Wednesday’s five percent tumble.

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There were hefty losses in New York and across Europe on Wednesday on heightened fears of a second wave of the deadly COVID-19 outbreak.

“Stock markets have edged up today after Wednesday’s falls, but there is still a lingering sense of caution over the signs of rising infection rates in the US,” said Chris Beauchamp, chief market analyst at online trading firm IG.

European markets held onto their gains until the close, while Wall Street engineered a strong finale to a roller-coaster session.

All three major US indices finished up by more than one percent, with large banks rallying after regulators eased rules imposed after the 2008 financial crisis.

“The battered banking sector provided unlikely leadership in the face of the negative COVID headlines, but we have to wait and see if today’s rally was only a ‘one-day-wonder’ or the pullback is already over,” said Gorilla Trades strategist Ken Berman.

– Rally set to stall? –

Still, a three-month surge across world markets, supported by the easing of lockdown measures and a wall of government cash, is showing signs of stalling as the virus sees a resurgence and raises questions about the pace of reopening.

A key worry is the US, where dozens of states, including Texas, Florida and Arizona, have seen infections surge in recent days.

Governors from Florida and Texas both announced they were pausing their reopenings amid a jump in cases.

Disneyland, near Los Angeles, delayed its planned July 17 reopening without announcing a new date for the world’s second-most visited theme park, while Apple and Nike have closed stores that had only recently reopened.

The issue has become serious enough for New York, Connecticut and New Jersey to announce they will impose a 14-day quarantine on people arriving from areas with high infection rates.

The World Health Organization, meanwhile, warned of jumps in cases in Europe that “if left unchecked will push health systems to the brink once again in Europe.

– US jobs figures disappoint –

Meanwhile, the latest US jobless data provided little cause for joy.

Another 1.48 million Americans filed new claims for unemployment benefits last week, the Labor Department said Thursday, a worse-than-expected figure that showed the continuing potency of the coronavirus pandemic.

The new claims were a decrease of only 60,000 from the week prior and brought the total since the business shutdowns began in mid-March to more than 47.2 million. 

“The disappointment in jobless claims underscored concerns the world’s largest economy will take a long time to recover,” said ThinkMarkets analyst Fawad Razaqzada.

– Key figures around 2200 GMT –

New York – Dow: UP 1.2 percent at 25,745.60 (close)

New York – S&P 500: UP 1.1 percent at 3,083.76 (close)

New York – Nasdaq: UP 1.1 percent at 10,017.00 (close)

London – FTSE 100: UP 0.4 percent at 6,147.14 (close)

Frankfurt – DAX 30: UP 0.7 percent at 12,177.87 (close)

Paris – CAC 40: UP 1.0 percent at 4,918.58 (close))

EURO STOXX 50: UP 0.7 percent at 3,218.91 (close)

Tokyo – Nikkei 225: DOWN 1.2 percent at 22,259.79 (close)

Hong Kong – Hang Seng: Closed for public holiday

Shanghai – Composite: Closed for public holiday

West Texas Intermediate: UP 1.9 percent at $38.72 per barrel

Brent North Sea crude: UP 1.8 percent at $41.05 per barrel

Euro/dollar: DOWN at $1.1217 from $1.1251 at 2100 GMT 

Dollar/yen: UP at 107.16 yen from 107.04 yen

Pound/dollar: DOWN at $1.2418 from $1.2419

Euro/pound: DOWN at 90.31 pence from 90.59 pence

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