By Geoffrey Smith
Investing.com — U.S. stock markets clawed their way into the green Friday, the last day of a quarter that is set to be their worst in over a decade, as investors weighed the economic damage from the coronavirus pandemic against hopes for further fiscal stimulus and signs some measures against the disease may be slowing the spread.
Positive overnight news flow from the Chinese economy and from some of Europe’s latest Covid-19 figures was further helped after Dr. Anthony Facui, director of the National Institute of Allergy and Infectious Diseases, told CNN there was a glimmer of hope social distancing in the U.S. was starting to slow the spread of Covid-19.
That was countered by new forecasts for the U.S. economy from Goldman Sachs (NYSE:GS), whose analysts said they expect the jobless rate to hit 15% in the second quarter, and gross domestic product to fall by an annualized 34%.
The warning from Goldman comes two days before the release of the U.S. labor market report for March, which is expected to show a leap in joblessness as a result of the creeping shutdown of factories, restaurants, bars, gyms and other businesses over the month. The same factors will already be on show in Thursday’s weekly jobless claims report. Analysts polled by Investing.com predict another 998,000 increase in jobless claims last week.
Also this morning, President Donal Trump tweeted that the U.S. should use low borrowing costs to launch a $2 trillion infrastructure program that would also provide jobs.
Among individual stocks, Zoom Video Communications (NASDAQ:ZM) stock was down 3.5% after the New York Times reported that New York Attorney-General Letitia James had written to it to express concern about its data privacy practices, amid reports that the company sent data to Facebook (NASDAQ:FB) without informing users.
Zoom is currently the best-selling app in the U.S. iStore, reflecting the surge in demand from people forced to work and educate their children from home. It has doubled in value since the Covid-19 outbreak began, and at its peak was worth more than the big four U.S. airline groups combined.
Elsewhere, Carnival (NYSE:CCL) rose 9%, reversing early losses, after the cruise line operator unveiled a $6 billion recapitalization plan, of which around one quarter will be in stock, half in three-year senior debt and the rest in convertible notes, also due in 2023. The company has had little option, given its difficulty, as a leisure company, of claiming privileged access to federal funds under the last economic support package.
Tightening financial conditions in the real economy were also on show as Delphi Technologies PLC (NYSE:DLPH) stock fell 19.4% after BorgWarner (NYSE:BWA) threatened to walk away from its agreed merger with the troubled auto parts group. Delphi had drawn down a credit facility to ease an acute cash squeeze, but had breached the terms of the merger deal by failing to get the approval of its larger rival in writing first. BorgWarner stock was up 1.4%.
In the oil patch, oil and gas stocks were generally higher after Presidents Donald Trump and Vladimir Putin made soothing noises about supporting the oil market after a telephone call on Monday. U.S. crude futures rallied 2.8% to $20.66 a barrel. Royal Dutch Shell (LON:RDSa) ADRs (NYSE:RDSa) were up 6.4% after the company said it had agreed a new $12 billion bank facility, strengthening hopes that it will pay out its full-year dividend, in full and in cash. Imperial Oil (NYSE:IMO) stock rose 13.2% after the company said it will cut capital spending this year by around one-third to conserve cash.
Stocks – Wall Street Edges Higher as End of Quarter Approaches
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