Here are the key news, trends, and analysis investors need to start their trading day:
1. Wall Street plans to extend its recovery rally until day three
A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan neighborhood of New York on April 16, 2021.
Carlo Allegri | Reuters
US stock futures were flat after two days of strong gains, making Monday’s big sell-off seem like a distant memory. The Dow rose another 286 points, or 0.8%, on Wednesday. Coupled with Tuesday’s 549 point gain, the average of 30 stocks turned positive for the week. The S&P 500 and Nasdaq also gained nearly 1% on Wednesday. All three stock benchmarks were less than 1% from their last record closing times on July 12th prior to Wall Street opening Thursday. Investors appear to have shaken off their immediate concerns about the spread of the Delta variant and the increase in Covid cases.
2. Initial jobless claims increase unexpectedly
The Labor Department on Thursday reported an unexpected surge in initial jobless claims to 419,000 for the past week, the highest weekly number since May 15. New claims for unemployment benefits for the previous week were revised up to 368,000, which corresponds to the low point of the Covid era last month. The 10-year government bond yield fell to around 1.27% after hitting a 5½-month low of nearly 1.13% earlier this week, according to the Unemployment Claims report. Bond yields move in the opposite direction to bond prices. In terms of claims data, too, stocks took a hit ahead of the market.
Later Thursday at 10 a.m. ET, the National Association of Realtors released its June report on Existing Home Sales. Economists expect an increase of 2.2% to 5.93 million units per year. Existing home sales were down 0.9% in May. Snap and Twitter will be the first of the major ad-supported internet companies to report profits on Thursday after the bell, while Alphabet’s Google, Facebook, Pinterest and Amazon will follow next week. Apple’s recent privacy changes are unlikely to affect those tech revenues in the second quarter.
3. AT&T exceeds estimates for cellular subscriber growth in 5G demand
A pedestrian walks outside an AT&T location in New York.
Scott Mlyn | CNBC
AT&T on Thursday surpassed analyst estimates for the monthly phone bill that paid new subscribers in the second quarter, fueled by the move more Americans to 5G. WarnerMedia, the company’s media unit, gained 2.8 million US subscribers in the quarter for its premium channel HBO and the streaming platform HBO Max. In May, AT&T agreed to spin off its media holdings with Discovery and turn it into a deal that is expected to close in mid-2022. AT & T’s earnings per share of 89 cents exceeded expectations, as did sales of just over $ 44 billion. Before the IPO, the shares rose by around 1.5%.
4. American airlines from the Southwest are seeing a huge leap in sales
An American Airlines aircraft lands at Miami International Airport in Miami, Florida on June 16, 2021.
Joe Raedle | Getty Images
American Airlines posted a profit for the second quarter on Thursday as federal aid and travel demand increased. The Fort Worth-based airline reported net income of $ 19 million and posted losses for five consecutive quarters. Adjusted for one-time effects, however, American lost $ 1.69 per share, less than expected. Revenue rose 360% year over year to $ 7.48 billion after the Covid collapse last year. Revenue was still down 35% compared to the second quarter of 2019.
A Southwest Airlines Boeing 737-7H4 jet rolls for the gate after landing at Midway International Airport in Chicago, Illinois on April 6, 2021.
Kamil Krzaczynski | AFP | Getty Images
Southwest also reported a jump in sales for the quarter. Revenue for the Dallas-based airline rose nearly 300% year over year to $ 4 billion. That was still 32% less than in the same period of the previous year. Net income for the second quarter was $ 348 million, compared to a loss of $ 915 million a year earlier. On an adjusted basis, Southwest lost 35 cents a share, more than expected. In the premarket, Southwest and American stocks were lower.
5. Fauci says people who have been vaccinated might consider masks indoors
People wearing protective masks shop at a Walmart store in Hallandale Beach, Florida on May 18, 2021.
Joe Raedle | Getty Images
White House senior medical advisor Dr. Anthony Fauci said people who are fully vaccinated should consider wearing masks indoors as a precaution against the rapidly spreading Delta variant. Some areas of the country are reintroducing mask requirements due to spikes in cases. The more transmissible variant now accounts for around 83% of the sequenced Covid cases in the country, according to the Centers for Disease Control and Prevention. Variants are more transmissible than the original strain, and some make vaccines less effective.
– Reuters contributed to this report. Follow all market activity like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.