Thursday's Stock Market Close: US Equities Fall, But Stocks Deliver Strong April Performance

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. However, for the month, U.S. stocks rallied strongly.

The Dow Jones Industrial Average dropped 288.14 points to 24,345.72, while the S&P 500 fell 27.08 points to 2,912.43 and the Nasdaq Composite Index tumbled 25.16 points to 8,889.55.

For the month of April, the Dow jumped 11.1%, while the S&P 500 gained 12.7%

Thursday’s volume on the New York Stock Exchange totaled 5.2 billion shares with 795 issues advancing, 17 setting new highs, and 2,171 declining, with two setting new lows.

Active movers were led by AgEagle Aerial Systems Inc. (UAVS), General Electric (GE), and American Airlines (AAL).

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 expenditure, or PCE, index rose 1.3% annually for March, down from 1.8% growth 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 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.

“There’s a gap between what markets are doing and what we’re seeing in the underlying economy,” said Tom Hainlin, global investment strategist at Ascent Private Capital Management. “The question everyone has is how far has the market gone ahead of where the market needs to support those prices. That’s why we haven’t been overly aggressive.”

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

Crude oil futures jumped 26.56% at $19.06 per barrel, Brent crude gained 0.42% at $26.59. Gold futures fell 0.93%.

The euro gained 0.73% at $1.0953 while the pound sterling rose 0.97% at $1.2589.

The yield on the 10-year Treasury slipped 1.12% to 0.622% while yield on the 30-year Treasury rose 1.69% to 1.266%.