Stocks drift lower as early rally fizzles, Nasdaq 100 bounces off new high

Stock futures rose slightly Thursday evening, drifting higher as investors awaited the Labor Department’s May jobs report and digested very early signs of recovery in the virus-stricken economy.

U.S. equities closed out Thursday’s session mostly lower, with the S&P 500 ending a four-session winning streak and dropping by the most since May 21. Still, the index paced toward weekly gains of more than 2% after rallying earlier this week. Hopes that more businesses were ramping up activity amid the pandemic eclipsed concerns of protests and unrest in many cities across the country.

The Labor Department’s jobs report Friday morning will be a closely watched print to close out the week, with the report set to reflect further damage to the labor market after April’s already historic 20.5 million non-farm payrolls losses. Consensus economists expect another 8 million payrolls were slashed in May and that the unemployment rate jumped to 19.5% – the highest level since the Great Depression.

But the report, which covers the week including the 12th of the month, will capture only the very early stages of the reopening process for many states. Many investors have already started looking to more recent economic data which, while still weak on a historical basis, has at least shown improvement from the depths of the virus-induced downturn. The Labor Department’s weekly report Thursday showed new jobless claims fell to 1.877 million for the last week of May, which was slightly higher than expected, but marked the eleventh straight week that new claims fell over the prior week.

Some businesses have also begun seeing a pick-up in consumer and business activity from the doldrums of late March and April.

American Airlines (AAL) said Thursday it was scheduled to fly more than 55% of its July 2019 domestic capacity for July this year, up from just 20% in May, citing “improving demand for air travel.” The announcement sparked a 41% surge in American Airlines’ stock Thursday, and shares of peer airlines rose in sympathy.

Investors have also begun showing an increased appetite for newly public companies, snapping up shares of companies making their public debuts this week after a virtual IPO market freeze in the midst of the coronavirus pandemic. Software information database company ZoomInfo Technologies (ZI) shares closed 62% higher Thursday in their first day of trading, in the first U.S. technology IPO since April. This came a day following Warner Media Group’s (WMG) own public debut on the Nasdaq, after the company raised $1.93 billion in an upsized initial public offering for the largest U.S. listing so far this year.

6:02 p.m. ET Thursday: Stock futures tick higher

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:02 p.m. ET:

  • S&P 500 futures (ES=F): 3,114.25, up 3.75 points

  • Dow futures (YM=F): 26,287, up 34 points

  • Nasdaq futures (NQ=F): 9,642, up 15.75 points

NEW YORK, NY – APRIL 30: A boarded up Coach store is seen on April 30, 2020 in New York City. Coach’s parent company Tapestry reported that sales were down nearly 20 percent because of store closures due to the coronavirus (COVID-19) pandemic worldwide. (Photo by Eduardo MunozAlvarez / VIEWpress via Getty Images)

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