Even though the grim facts that the unemployment numbers have now topped 30 million and, as today’s expert says, we’ve seen “the worst economic data since the Great Depression,” there is nevertheless enough optimism in the market that both the Dow and S&P have seen their best monthly gains since 1987, and the Nasdaq its best since 2000.  Despite the fact that the indexes all took a modest dive today, the Dow losing 288 points, all the indexes are still better than 20% from their record February highs.  The consensus is clear: the slump is entirely the result of the lockdowns, the economy otherwise being in good shape, and so as soon as this emergency is resolved, jobs, business activity, consumer spending et. al. will gradually return to pre-pandemic normals.  How quickly this will happen is of course another question.  But Q1 is going better than expected.  236 S&P companies have reported and two-thirds have beaten estimates.  The Q1 earnings forecast has today been revised upwards from being 15.1% down yesterday to being 14.4% down today.  Volume remains fairly steady, today at 12.8 billion. 

thu  APRIL 30, 2020 / 4:42 pm    

Wall St. caps best month in decades with broad sell-off

Stephen Culp

DJ:  24,633.86  +532.31        NAS:  8,914.71  +306.98       S&P: 2,939.51  +76.12     4/29

DJ:  24,345.72  -288.14         NAS:  8,889.55  -25.16          S&P: 2,912.43  -27.08      4/30

NEW YORK (Reuters) - U.S. stocks lost ground on Thursday as grim economic data and mixed earnings prompted investors to take profits at the close of the S&P 500’s best month in 33 years, a remarkable run driven by expectations the economy will soon start recovering from crushing restrictions enacted to curb the coronavirus pandemic.  While risk-off selling pulled all three major U.S. stock averages into the red, the S&P 500 and the Dow posted their largest monthly percentage gains since January 1987, with the Nasdaq having its best month since June 2000.

The three indexes remain well within 20% of record highs reached in February, having quickly rebounded since shutdown efforts to curb the spread of the coronavirus pandemic brought the economy to a grinding halt.  The five-week tally of unemployment claims topped 30 million and consumer spending has plummeted, according to the latest round of dismal indicators providing another snapshot of the crushing economic effects of the widespread shutdown.  “We’ve had a tremendous run but we’ve had the worst economic data since the Great Depression,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “Business and earnings might not be snapping back as quickly as the v-shaped recovery on Wall Street would imply.”

The Federal Reserved announced that it would broaden its “Main Street Lending Program” by lowering the minimum loan size and expanding eligibility.  “Wall Street is liking all the programs that the government and the Fed are putting together,” Nolte added. “So Wall Street is doing fine but Main Street is going to be a longer process.”

The Dow Jones Industrial Average .DJI fell 288.14 points, or 1.17%, to 24,345.72, the S&P 500 .SPX lost 27.08 points, or 0.92%, to 2,912.43 and the Nasdaq Composite .IXIC dropped 25.16 points, or 0.28%, to 8,889.55.  Of the 11 major sectors in the S&P 500, all but consumer discretionary .SPLRCD and communications services .SPLRCL closed in negative territory, with materials .SPLRCM and financials .SPSY suffering the largest percentage losses. 

Earnings season continues apace, with 236 of the companies in the S&P 500 having reported quarterly results. Of those, two-thirds have surprised consensus estimates to the upside, according to Refinitiv data.  But there have been 90 negative pre-announcements in the first quarter, compared with 40 positive, and analysts see aggregate S&P 500 earnings dropping by a year-on-year rate of 14.4% in the first three months of 2020, per Refinitiv.

Market leaders Apple Inc (AAPL.O) and Amazon.com (AMZN.O) reported results after the closing bell. In post-market trading, Apple shares gained more than 2% while Amazon.com was down over 5%.  Facebook Inc (FB.O) climbed 5.2% after the social media company reported better-than-expected quarterly revenue.  American Airlines (AAL.O) posted its first quarterly loss since emerging from bankruptcy in 2013, sending its shares down 4.9%. 

Declining issues outnumbered advancing ones on the NYSE by a 2.58-to-1 ratio; on Nasdaq, a 2.81-to-1 ratio favored decliners.  The S&P 500 posted three new 52-week highs and one new low; the Nasdaq Composite recorded 25 new highs and four new lows.

Volume on U.S. exchanges was 12.80 billion shares, compared with the 12.3 billion average over the last 20 trading days.