Thursday's Stock Market Open: US Equities Fall On Huge Jobless Claim Filings, ECB Rate Decision

Update: 12:05 p.m. EDT:

U.S. stocks remained in the loss column as of noon Thursday.

The Dow Jones Industrial Average dropped 405.64 points to 24,228.22, while the S&P 500 fell 43.43 points to 2,896.08 and the Nasdaq Composite Index tumbled 75.02 points to 8,839.69.

In Europe markets finished lower, as Britain’s FTSE-100 dropped 3.5%, France’s CAC-40 tumbled 2.12% and Germany’s DAX slipped 2.22%.

Original story:

U.S. stocks fell on Thursday as another 3.84 million Americans filed initial jobless claims and the European Central Bank kept interest rates unchanged.

The Dow Jones Industrial Average dropped 277.61 points to 24,356.25, while the S&P 500 fell 21.84 points to 2,917.67 and the Nasdaq Composite Index slipped 9.26 points to 8,905.45.

Initial jobless claims hit 3.84 million last week, bringing the rolling six-week total to 30.3 million.

Diane Swonk, chief economist at Grant Thornton, tweeted: “The key issue for policy makers is to not become complacent as PPP [Paycheck Protection Program] grants bring workers back. COVID-19 hit the economy hard and will be a major drag on overall economic activity until the virus is tamed. That cannot happen as fast as anyone would like and will require more aid.”

Personal income fell by 2% in March, while disposable income also dropped 2%. Consumer spending slumped 7.5% last month. The headline personal consumption expenditures, or PCE, index rose 1.3% annually for March, down from 1.8% in February. The core PCE index, which strips out the volatile food and energy sectors, slipped to 1.7% in March from 1.8% in February.

The European Central Bank, or ECB, kept its main interest rates unchanged on Thursday.

“The Governing Council is fully prepared to increase the size of the [pandemic emergency purchase program] and adjust its composition, by as much as necessary and for as long as needed,” ECB said.

The ECB also launched a new program called PELTROS (pandemic emergency longer-term refinancing operations) which will provide more cheap liquidity for European banks. Viraj Patel, foreign exchange and global macro strategist at Arkera, described this measure as a “stimulus package for European banks.”

The euro zone economy shrank by 3.8% in the first quarter of 2020, on a sequential basis, the largest contraction in the region since recordkeeping began in 1995. The French economy contracted 5.8% in the quarter, while Spain’s GDP shrank by 5.2%.

ECB President Christine Lagarde warned the euro zone economy could shrink by 5% to 12% in 2020.

Facebook (F) reported first-quarter earnings of $1.71 per share on revenues of $17.74 billion.

Microsoft (MSFT) sad its fiscal third-quarter sales grew by 15% due largely to growth in its cloud business.

Overnight in Asia, markets finished higher. China’s Shanghai Composite rose 1.33%, Hong Kong’s Hang Seng was closed for a holiday and Japan’s Nikkei-225 climbed 2.14%.

In Europe markets traded lower, as Britain’s FTSE-100 dropped 2.14%, France’s CAC-40 tumbled 1.33% and Germany’s DAX slipped 1.38%.

Crude oil futures jumped 12.28% at $16.91 per barrel, Brent crude gained 8.67% at $26.33. Gold futures edged down 0.12%.

The euro slipped 0.29% at $1.0842 while the pound sterling edged up 0.19% at $1.2492.