Fred Imbert,Thomas Franck
Dow Jones Industrial Average futures were up 118 points, or 0.5%. S&P 500 futures gained 0.1% while Nasdaq 100 futures dipped 0.4%.
Gains were kept in check after China’s National People’s Congress approved a national security bill for Hong Kong. The bill will bypass Hong Kong’s legislature, raising concerns over the longevity of Hong Kong’s “one party, two systems” principle, which allows additional freedoms mainland China does not have.
The market moves Thursday promised to add to sharp rallies in the major stock indexes so far this week.
The Nasdaq Composite, S&P 500 and Dow all extended week-to-date gains during Wednesday’s regular trading session and finished the day up 0.77%, 1.48% and 2.2% respectively. The broad S&P 500 closed at its highest level since March, above 3,000; the Dow jumped 553 points to finish Wednesday’s session north of 25,000, its own highest close since March.
The S&P 500, Nasdaq Composite and Dow are up 2.7%, 0.9% and 4.4% since the start of the holiday-shortened week. The Dow is on track for its best week since the week ended April 8.
Equity of companies that stand to benefit the most under reopenings, such as the airlines and retailers, led the major indexes higher Tuesday and Wednesday. Kohl’s, Nordstrom and Gap all rose at least 14% on Wednesday while airlines Delta, American, Alaska and United rose 2.6%, 7.5%, 2% and 3.8%, respectively.
Meanwhile, those stocks that outperformed as stay-at-home orders went into effect in March have lagged in recent sessions. Zoom Video dropped 1.2%; Shopify, Amazon and Teladoc Health fell 2.3%, 0.6% and 1.1%, respectively.
Governor of the Reserve Bank of Australia Philip Lowe offered more optimistic comments on the country’s economic situation and the efficacy of efforts to contain the impact of Covid-19.
Lowe told lawmakers that since the nation’s health outcomes are better than earlier feared, “it is possible that the economic downturn will not be severe as earlier thought.” He added that the central bank’s mid-March move to guarantee liquidity and easy borrowing “is working as expected and it is helping build the necessary bridge to the recovery.”
Thursday’s forthcoming update to the U.S. unemployment claims threatened to keep the week’s optimism in check.
The Department of Labor is scheduled to release the latest update to initial jobless claims at 8:30 a.m. ET Thursday morning. Though economists polled by Dow Jones expect the government to announce yet another deceleration in the pace of claims, the consensus estimate predicts another 2.05 million Americans filed for insurance during the week ended May 23.
Last week, the Labor Department reported another 2.44 million Americans had filed claims in the week ended May 16, which brought the coronavirus crisis total to some 38.6 million, by far the largest loss in U.S. history.