U.S. stock-index futures were trading mixed early Thursday, but trying to rise back into positive territory, following a preliminary reading of the health of the U.S. economy that indicated a massive rebound in growth from the recession caused by the coronavirus pandemic.
Investors were also wrestling with data showing a sharp rise in coronavirus cases in the U.S. and Europe and sifting through corporate results on one of the busiest days of earnings reporting of the season.
Futures on the Dow Jones Industrial Average
off 52 points, or 0.2%, to 26,350, while S&P 500 futures
were up 2.50 points, or 0.1%, at 3,266.25. Nasdaq-100 futures
gained 57.75 points, or 0.5%, to trade at 11,189.75.
on Wednesday dropped 943.24 points, or 3.4%, to close at 26,519.95 for its fourth straight loss. The S&P 500
lost 119.65 points, or 3.5%, to end at 3,271.03, for its third straight decline, while the Nasdaq Composite
closed at 11,004.87, down 426.48 points, or 3.7%.
The Dow and S&P 500 saw their worst one-day percentage drop since June 11, while the Nasdaq suffered its biggest decline since Sept. 8. The S&P 500 and Nasdaq erased their October gains with Wednesday’s selloff, joining the Dow, which had turned lower for the month earlier in the week.
What’s driving the market?
A closely watched report about the U.S. economy’s health amid the pandemic showed that gross domestic product soared at a record 33.1% annual pace in the third quarter. A more recent surge in infections in the U.S., meanwhile is contributing to fears the domestic and global economy could see another slowdown, undercutting the V-shaped rebound seen since the pandemic forced the near shutdown of activity around much of the world earlier this year.
The widely expected snapback in GDP, the official scorecard of the U.S. economy, also was given a big assist by trillions of dollars in government aid to families, the unemployed and businesses most harmed by the virus, but that assistance ended at the start of August and it isn’t clear when or if a new coronavirus relief package will move forward in Congress.
“ The strong GDP performance gives a false impression of the economy’s true health,” wrote Gregory Daco, chief economist at Oxford Economics in a Thursday report.
“ Lest we be tempted by alluring rearview mirror economics, or confused by misleading annualized GDP figures, our weekly US Recovery Tracker points to a dangerous plateau entering Q4,” he wrote.
The report on GDP came as a report on weekly U.S. jobless claims fell to a 7-month low of 751,000, suggesting layoffs are easing despite a rise in coronavirus infections.
New claims fell by 40,000 in the seven days ended Oct. 24. Economists polled by MarketWatch had forecast a 770,000 reading. This is the fourth decline in the past five months.Claims in the prior week were revised higher to 791,000 from 787,000.
Jobless claims remain high by historical standards, and the pickup in job creation has slowed considerably. The Wall Street Journal reports that anecdotal evidence—companies big and small announcing plans to lay off more workers as the pandemic persists—suggests the labor market recovery will be protracted.
Early Thursday equities in Europe and the U.S. were regaining some of the ground lost in Wednesday’s rout when Germany and France moved to impose tighter restrictions on activity in response to a sharp rise in COVID-19 cases.
Meanwhile, the European Central Bank left policy on hold at the conclusion of its policy meeting Thursday morning, but signaled that further action is likely to come in December, saying it would “recalibrate instruments, as…