U.S. stock index futures bounced on Thursday as oil prices recovered on hopes of a Saudi-Russia deal to cut output, but expectations of another surge in U.S. jobless claims due to the coronavirus kept investors on edge.
Exxon Mobil Corp and Chevron Corp jumped more than 5% in premarket trading, as crude prices surged after U.S. President Donald Trump said he expected the oil titans to reach an agreement to cope with plunging demand.
Wall Street fell 4% on Wednesday, with the Dow and S&P 500 deepening losses from their worst quarter in a decade, as more U.S. companies cut production and withdrew financial forecasts, raising the risk of corporate defaults.
Boeing Co, once a symbol of U.S. industrial strength, said on Thursday it would offer buyout and early retirement packages to employees in the face of a near collapse in global travel demand. Its shares rose 3% before the bell.
“Until investors are able to put a price on the final cost of the economic impact from the virus pandemic, any predictions of where the bottom is for stocks will be deemed premature,” said Raffi Boyadjian, senior investment analyst at XM in Cyprus.
At 7:50 a.m. ET, Dow e-minis were up 401 points, or 1.93%. S&P 500 e-minis were up 46 points, or 1.88% and Nasdaq 100 e-minis were up 118.25 points, or 1.59%.
The S&P 500 has lost about $8 trillion in market value since a mid-February record high as the outbreak spread deeper in the United States and Trump warned of more economic pain in the next two weeks as efforts to contain the virus crush business activity.
Initial claims for state unemployment benefits are likely to have shot up to a seasonally adjusted 3.5 million for the week ended March 28, racing ahead of the previous week’s record 3.3 million figure. Some estimates range as high as 5.25 million.
“Another record in initial jobless claims could raise questions as to what other measures officials could adopt,” said Charalambos Pissouros, senior market analyst at JFD Group.
“The Fed was never in favor of the ‘negative rates regime’, but it remains to be seen whether the damages caused by the virus outbreak will force them to make an exception.”
Across the Atlantic, British Airways jumped 3% after reports it was in talks with its union about a plan to suspend around 32,000 staff, marking one of the industry’s most dramatic moves yet to survive the coronavirus impact.
Delta Airlines, United Airlines Holding and American Airlines, among the most battered U.S. stocks this year, rose about 5%.
Southwest Airlines Co jumped 3% as it said it intended to file an application with the U.S. Treasury department for aid related to the disruption caused by the health crisis.