Stock futures turned positive Thursday, as weekly jobless claims topped 4.4 million, but were down from a week earlier. Earnings news and spiking oil prices influenced early trade. Casino owners rallied after a bullish outlook from Las Vegas Sands. Walmart lagged on the Dow Jones today, tripped up by a sales update from Target.
Dow Jones futures crept 0.2% above fair value, while Nasdaq 100 futures and S&P 500 futures each managed a 0.4% gain on the stock market today. House legislators are expected to vote on Thursday to approve a $484 billion coronavirus stimulus package passed by the Senate on Wednesday.
Target (TGT) tumbled 5% after reporting that the lockdown economy led to same-store-sales growth of only 5% so far in April, vs. a 20% surge during the same period in March. Online sales had spiked 275%, however, and higher labor costs and lower margin volume sales are pressuring margins.
Among leading stocks, Domino's Pizza (DPZ) — an IBD Leaderboard and Long-Term Leader — dipped 0.5% after its first-quarter report. Eli Lilly (LLY) edged up 1.1% and Citrix Systems (CTXS) dropped 4% after delivering results. All three stocks ended Wednesday slightly extended from recent breakouts.
New Jersey-based biotech Immunomedics (IMMU) spiked more than 33% early, after the Food and Drug Administration late Wednesday gave accelerated approval to the company's Trodelvy breast cancer treatment. Shares at Wednesday's close had spiked 150% off an April 3 low.
Jobless Claims Soar, But Decline from Prior Week
Jobless claims came in at 4.427 million during the week ended April 18, down from 5.237 million claims in the prior week and almost exactly in line with economist expectations. The decline and the matching of estimates were both positives, but nevertheless brought the total number of first-time unemployment claims filed over the past five weeks to 26 million.
The Nasdaq, S&P 500 and Dow Jones industrials have all gained ground during the sessions in which each of the past three weekly jobless claims report were delivered.
S&P 500: Casinos, Oil Prices Drive Early Trade
Casino owners Las Vegas Sands (LVS) and Wynn Resorts (WYNN) traded highest among S&P 500 stocks, following first-quarter results from Las Vegas Sands. Also high on the S&P 500, Chipotle Mexican Grill (CMG) gained more than 2%, moving nearer to a buy point after BMO Capital upgraded the stock and boosted its price target.
Oil prices remained a factor in early trade Thursday — back on positive footing, but neither steady nor stable. West Texas Intermediate spiked 20% in early action, but still traded below $17 a barrel. Europe's Brent crude benchmark rebounded 8.1%, to near $22.
Behind the casinos, oil producers packed the top of the S&P 500, while Exxon Mobil (XOM) and Chevron (CVX) topped the Dow in early trade. The energy sector represents less than 5% of the S&P 500 total sector weighting — vs. almost 15% for healthcare and 23% for information technology. But moves in the sector tend to be highly volatile, imposing a powerful influence on the direction of the index.
Wynn Resorts led the Nasdaq 100. Xilinx (XLNX) and Citrix Systems fell to the bottom of the list, down about 4% apiece.
Earnings News: Sleep Number, Las Vegas Sands
Sleep Number (SNBR) and Las Vegas Sands were the big earnings winners early Thursday, up 17.5% and 8.9%, respectively. Sleep Number reported a 70% earnings gain vs. expectations for a 10% decline.
Las Vegas Sands swung to a 3-cent per-share loss. Revenue imploded 51%. Both numbers were better than analysts had forecast, and the company reported $2.6 billion in cash and $3.93 billion available through credit facilities. Management projected the economic rebound in Asia, including the company's key properties in Macau, would occur more quickly than generally expected.
JPMorgan upgraded Las Vegas Sands stock to overweight, with a 52 price target. Deutsche Bank raised its price target to 54, from 50. Other Macau owners also gained. Wynn Resorts surged more than 6%. MGM Resorts International (MGM) climbed 2.3%.
Chipmakers picked up the pace on the earnings front, with Xilinx and Seagate Technology (STX) losing ground after their reports late Wednesday, and Intel's first-quarter report due out after the close Thursday.
Asset manager Blackstone Group (BX) surged 5% despite reporting weaker-than-forecast earnings. Management declared the outfit's more than $150 billion in "dry-powder capital" leaves it "uniquely positioned to invest on behalf of our clients at a time of historic dislocation."
Coronavirus Update: U.S. Active Cases Top 710,000
Worldwide, 81,296 new cases of coronavirus were reported in the 24 hours to Thursday morning, according to Worldometer data. That 3.2% increase drove the cumulative global total for the illness above 2.65 million. The U.S. represented almost 32% of that total. About 38% of the total cumulative cases had occurred in countries of the European Economic Area.
Some of the largest ongoing increases were reported in Russia, Singapore and Spain.
The U.S. added another 29,917 confirmed new cases from Wednesday to early Thursday. Deaths continued apace, with another 2,338 succumbing to the virus. That raised the total number of deaths in the U.S. 5.2% to 47,681.
The number of active cases in the U.S., — the number of patients who have tested positive and are currently being treated or quarantined for the virus – surged 26,505 and sent the total number of confirmed currently infected patients above 710,000. This gives an indication of still rising pressure on hospitals and medical personnel.
Coronavirus Update: State Restarts
Montana, Oklahoma, Alaska, Texas and eight others are among the first states moving to reopen closed businesses and other portions of their economies. Georgia is among the eight, allowing businesses including beauty salons, tattoo parlors and bowling alleys to reopen as early as Friday.
President Donald Trump said Georgia Gov. Brian Kemp was not following federal guidelines outlining how states should go about economic restarts.
"It's just too soon," Trump said. Kemp said the state's decision was "driven by data and guided by state public health officials."
The Trump administration's Opening Up America Again guidelines prioritize a "downward trajectory of influenza-like illnesses reported within a 14-day period" for states planning to restart their economies. A robust testing and contact-tracing infrastructure should also be in place, to identify infected persons and isolate those with whom they have come into contact.
Testing infrastructure should also include "sentinel surveillance sites," to screen for persons who may be infected but not showing any signs of illness. Such "asymptomatic" individuals could lead to possible resurgences of Covid-19 cases, officials say.
Georgia has so far reported conducting just over 94,000 coronavirus tests. That averages out to around 9,100 tests per 1 million residents. Georgia is one of 17 states with testing rates still below 10,000 per million of its residents.
Dow Jones Today: Intel Earnings On Deck
The Dow Jones today continues to be a laggard in the stock market confirmed uptrend. The index ended Wednesday lagging behind the Nasdaq and S&P 500 advances, despite a strong boost from recovering oil prices.
Intel (INTC) topped Wednesday's action on the Dow, up 6.6% to just below a 61.59 buy point in a cup-with-handle base. The chipmaker was down 1.4% in premarket trade. Intel's first-quarter earnings report is due out after the close today. Analysts project a 44% surge in earnings, which would mark the company's strongest performance in eight quarters.
McDonald's (MCD) and Nike (NKE) both made strong moves on Wednesday, up 5% and 4.2%, respectively. McDonald's is up 50% from its March low, and recovered narrowly above its 50-day moving average on Wednesday.
Nike has been bouncing between its 50-day and 200-day lines since Friday. It is attempting to scale the right side of a possible 14-week cup base.
The overall market continues to rally. The Nasdaq staged a follow through on April 6 and ended Wednesday up 10.3% so far in April. The S&P 500 has an 8.3% gain. The Nasdaq is working on its first monthly advance since January. The Dow and S&P 500 have three red months under their belts. The Dow Jones today launches into Thursday's session toting a 7.1% advance so far in April. That puts the index on track for its best month since at least January 2019.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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