Wall Street rises despite record jobless high

Oil price gain boosts energy stocks, lifting stock markets in Europe and US

Stock markets are feeling the hit from the ongoing coronavirus pandemic. Photograph:  Kazuhiro Nogi / AFP via Getty Images)

Stock markets are feeling the hit from the ongoing coronavirus pandemic. Photograph: Kazuhiro Nogi / AFP via Getty Images)

 

Wall Street shook off a historic rate of US jobless claims after a record 30 per cent surge in oil prices boosted energy stocks. Gains for oil majors also pulled several European stock markets into positive territory, reversing the morning’s losses.

In the US, there were double-digit increases for Exxon Mobil and Chevron, which helped drive gains of more than 1.6 per cent in the first half of trading for both the S&P 500 and the Dow Jones Industrial Average.

In Europe, Royal Dutch Shell, BP and Total pushed markets higher after a lacklustlustre start to the day’s trading.

The Iseq index in Dublin finished down 2.2 per cent, as key stocks Ryanair, Glanbia and Kerry all finished in the red.

The FTSE 100 of blue-chip stocks added 0.5 per cent, but the mid-cap FTSE 250 was 0.8 per cent as several stocks reported fallout to their revenues and outlook from the Covid-19 pandemic.

In Germany, the Dax closed up 0.3 per cent, while the French Cac 40 added 0.3 per cent.

But the mood remained fragile as investors weighed the continuing impact of the coronavirus outbreak and the extension of lockdown regimes in several European countries.

The first quarter of 2020 was among stock markets’ worst in history, and further declines are expected as shutdowns to combat the Covid-19 outbreak drive more corporate budget cuts.

Company earnings

Analysts are predicting a 21.9 per cent decline in earnings for companies listed on the pan-European Stoxx 600 in the second quarter, according to Refinitiv data.

The shock US unemployment figures pointed to deep economic ructions from the coronavirus outbreak, fanning concerns over a global recession after data on Wednesday showed factory activity crashing in the euro zone.

The massive 6.65 million total far exceeded the median estimate of 3.5 million in a Reuters survey of economists.

But on equity markets, the dismal figures were outweighed by the oil price jump, which came after US president Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their price war and announce an output cut of 10 million to 15 million barrels per day.

“The surge in crude is helping the mood, so we’re seeing some relief in markets that have been hammered,” said Richard Steinberg, chief market strategist at Colony Group, in Florida.

– Additional reporting:Reuters