U.S. stock futures fell Thursday as coronavirus cases accelerated across the U.S., leading businesses to revisit plans for resuming normal operations and damping hopes of a rapid economic recovery.
Futures tied to the Dow Jones Industrial Average slipped 1.1% ahead of the opening bell in New York, signaling that blue-chip stocks may extend losses after dropping 2.7% on Wednesday.
Elsewhere, the pan-continental Stoxx Europe 600 erased earlier losses to trade 0.1% higher, while major Asian equity indexes ended the day lower.
The number of workers filing for unemployment benefits fell by 60,000 to 1.48 million in the week to June 20, worse than economists’ forecasts but confirming a consistent drop in new claims since a peak in late March.
Analysts said recent jobs data has a dwindling impact on market sentiment, describing it as backward-looking. Despite improving claims, the number of layoffs is still historically elevated and a full recovery appears distant.
“This data is irrelevant,” said James Athey, senior investment manager at Aberdeen Standard Investments. “Measurement issues are huge and it’s so short-term it purely relates to the removal of lockdown rather than the behaviors of consumers and businesses, so we can’t learn anything from this.”
A rise in new coronavirus cases in pockets of the U.S. has left businesses struggling to decide whether they should open, close or find a compromise. Apple on Wednesday said it would shut more stores in the Houston area following a sharp rise in cases. Walt Disney agreed to postpone the reopening of its California amusement park after workers urged the company to reconsider resuming operations in both Florida and California, where new cases touched fresh highs this week.
“This appears to be coming as a bit of a wake-up call that the exit from lockdown is not going to be an easy one,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management. The focus has now shifted to policy decisions taken by state and city governments, he added. “Countries across the world are going to be reluctant to go back to the national-level lockdowns we had in March and April, so now you’re having to go deeper to the state level.”
Concerns about the potential damage stemming from a second wave of infections have been tempered by cautious optimism that authorities will avoid reinstating the most stringent restrictions.
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“They don’t seem to be going into lockdown, they want to avoid that as much as possible,” said Jonas Golterman, senior markets economist at Capital Economics. “Authorities have some sense of how to deal with it and there’s still the view out there that it’s unlikely we’re going to go into full lockdown—and that’s what really damages the economy.”
Public-health officials expect uneven progress in containing the virus across the U.S., given municipalities’ differing decisions on business closures, as well as testing and tracing efforts. In Louisiana, for example, a decision to further reopen the economy was delayed earlier this week amid a surge in cases and hospitalizations.
Among the biggest movers ahead of the opening bell in New York, shares in builder KB Home dropped 16% and Darden Restaurants gained almost 2% following the companies’ latest results.
Shares of Walt Disney dropped 2.8% premarket after The Wall Street Journal reported the entertainment group is considering pushing back the launch of “Mulan”, in a sign that cinemas might not open as soon as many expected. Ally Financial’s shares gained 8.8% after the company called off its merger with Cardholder Management Services, which had been announced in February before the coronavirus rocked markets.
In Asia, South Korea’s Kospi Composite lost 2.3% and Japan’s Nikkei 225 benchmark dropped 1.2%. Markets in Shanghai and Hong Kong were closed for a public holiday.
As investors bought up haven assets, the yield on the 10-year U.S. Treasury note ticked down to 0.660%, from 0.683% on Wednesday.
In commodities, Brent crude, the international benchmark for oil prices, lost 0.1% to $40.47 a barrel, extending declines as new worries about the coronavirus added to reports of unexpectedly high U.S. inventories.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
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