Stocks have a lot to sort out Thursday. They rose significantly early in the morning on higher oil prices, before an ugly jobless claims report pushed the U.S. market into the red.
The S&P 500, Dow Jones Industrial Average and Nasdaq all flickered in and out of the green in the morning, with moves no greater than 1% on either side.
President Trump said Russia and Saudi Arabia were close to coming to terms on ending their oil price war. That boosted the market early in the morning, as not only did oil names see a boost, but other industries that derive higher revenues when oil companies spend more saw upticks. The U.S. is now a large producer and exporter of oil, so a strong oil outlook is a boon to economic growth.
The price of crude oil rose 8.5%.
Large oil companies like BP Oil BP, Chevron (CVX) - Get Report and Exxon Mobil (XOM) - Get Report all rose roughly 3%. But the smaller and highly indebted oil companies, Apache (APA) - Get Report, Halliburton (HAL) - Get Report and Occidental (OXY) - Get Report all rose more than 5%, as they are more sensitive to price swings on the upside and downside.
But pressuring the market now is another historically ugly jobless claims number, coming in at 6.6 million in the past week. That beats the prior reading of 3.2 million. The total number of jobless claims in the past several weeks, 9.8 million is roughly 3% of the U.S. population.
Much of the pain may be felt in the small business community, which generally does not have much excess cash and is becoming illiquid.
The market continues to discover how deep the current recession may be.
Congress’ $2 trillion spending plan, which includes forgivable loans — if employees are retained — and more than $1,000 to families, is a near-term help. Wall Street is worried that the money isn’t moving fast enough, while liquidity worsens.
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