Stocks continued their powerful rally in this holiday shortened week as the Fed continues its unprecedently aggressive monetary support, reporting new measures again today. The S&P 500 has now gained nearly 30% from trough-to-peak in the last few weeks as investors are largely ignoring near-term data, such as a second straight week of record jobless claims.
ECONOMIC EVENTS: In U.S. data, initial jobless claims fell 261,000 to 6.61M in the week ended April 3. The Producer Prices Index report largely tracked estimates in with a 0.2% decline for the March headline figure and a 0.2% rise for the core reading. wholesale inventories declined 0.7% in February and sales dropped 0.8%. Consumer sentiment plunged 18.1 points to 71.0 in the preliminary April report from the University of Michigan.
The Federal Reserve announced additional actions to provide up to $2.3 trillion in loans to support the economy. Among them, the Fed will boost the effectiveness of the Small Business Administration's Paycheck Protection Program, or PPP, by supplying liquidity to participating financial institutions; purchase up to $600 billion in loans through the Main Street Lending Program; and help state and local governments manage cash flow stresses by establishing a Municipal Liquidity Facility that will offer up to $500 billion in lending to states and municipalities. Also, to support further credit flow to households and businesses, the Federal Reserve will broaden the range of assets that are eligible collateral for the Term Asset-Backed Securities Loan Facility, or TALF.
In the U.K., Sky News reported that Prime Minister Boris Johnson, who is hospitalized with COVID-19, has been moved out of intensive care and back into a general ward where he will "receive close monitoring" during his recovery.
In New York, which has become the "epicenter" of the outbreak in the U.S., the State Department of Health COVID-19 Tracker reported 10,621 new positive tests for COVID-19 on April 8, for a total of 159,937 total positive tests in New York State.
Additionally, Governor Andrew Cuomo said in his daily briefing on the matter that COVID-19 has been "more devastating for the economy than 9/11," adding that "curves are flattening better than projections because people are complying with policy."
TOP NEWS: Shares of Disney (DIS) gained 3.5% after the media giant announced that Disney+ has reached over 50M paid subscribers just under five months following the launch of the streaming service. The announcement suggests Disney+ could reach nearly 70M subscribers by the end of June, according to Rosenblatt analyst Bernie McTernan.
General Electric (GE) withdrew its FY20 guidance due to COVID-19, adding that it preliminarily expects adjusted EPS to be "materially below" its prior guidance of about 10c for the first quarter ended March 31.
Similarly, Starbucks (SBUX) withdrew its guidance for FY20, stating that it is "currently unable to estimate the full financial impacts beyond Q2 with reasonable accuracy." Starbucks said in a letter to stakeholders that it preliminarily estimates Q2 non-GAAP EPS will be approximately 32c and reported same-store-sales in the U.S. to be down 3%.
MAJOR MOVERS: Among the noteworthy gainers was Big Lots (BIG), which surged 24.6% after entering a sale and leaseback agreement with $550M in expected net proceeds. Also higher was Nautilus (NLS), which jumped 56.7% after it reported preliminary Q1 revenue above estimates.
Among the notable losers was ViewRay (VRAY), which slid 2.9% after the company said its senior executives will take pay cuts for the remainder of 2020. Also lower was Extreme Networks (EXTR), which fell 8.6% after the company announced cost cutting measures and lowered its adjusted earnings per share guidance for Q3.
INDEXES: The Dow rose 285.80, or 1.22%, to 23,719.37, the Nasdaq gained 62.67, or 0.77%, to 8,153.58, and the S&P 500 advanced 39.84, or 1.45%, to 2,789.82.
