The market fell Thursday on a plunge in second-quarter economic growth, a glum outlook from the Federal Reserve and the second week of rising unemployment claims since the summer COVID surge – with California again clocking the most newly jobless.
Congress and the White House meanwhile were struggling to hash out the next round of emergency stimulus funding to help counter COVID’s economic devastation.
Exhibitors were a bright spot following a momentous deal between the nation’s largest exhibitor AMC Entertainment and Universal Studios that shortens the theatrical window to 17 days. AMC’s been bouncing today but was most recently trading up 1.86%. The nation’s third largest chain Cinemark was clocking gains of nearly 5% and Imax of nearly 7%. The large format exhibitor reported solid numbers late yesterday.
Stock of Universal parent Comcast, which announced quarterly earnings early Thursday, was up 0.55%.
SiriusXM, which also posted decent financials this morning and said contract talks are ongoing with star host Howard Stern, was up strongly in the morning but changing hands flat to slighly down in a volatile market.
Four tech giants, whose executives took a grilling at a Congressional antitrust hearing yesterday, are skedded to report their latest quarter after the bell. Shares of Facebook, Apple, Amazon and Google parent Alphabet saw their shares up, respectively, 0.06%, 0.51%, 1.9% and 0.17%.
The DJIA was down about 200 points midday, off its lows following a report by the Bureau of Economic Analysis that gross domestic product decreased at an annual rate of 32.9% in the second quarter. That compares with a 5% decrease in the first quarter and is the worst plunge the Bureau has recorded since it started in 1947. The worst to date was a 10% decline in the first quarter of 1958, according to news reports that looked through the records. The plunge reflected the shutdown in response to COVID-19.
Separately Thursday, the Department of Labor said initial U.S. jobless claims for the week ended July 25 rose 12,000 from the week before to 1.434 million. California posted the highest number of new claims, at 249,007, followed by Florida, Georgia, New York and Texas.
It’s the second week in a row new unemployment claims were up. They surged by record levels in the period following the initial COVID shutdown but had begun to tick lower before the latest surge in cases. Still, the number of new claims exceeded 1 million for 19 consecutive weeks and more than 50 million people have filed for unemployment.
The stats confirmed what the Federal Reserve flagged yesterday – that a recovery from the trough in the second quarter ended in June may be slower than originally anticipated. The Fed pledged its continuous support.