Global stocks sell-off eases despite dire US unemployment report

A global stocks sell-off spurred by coronavirus fears eased on Thursday even as new data showed that more than 6 million Americans filed for unemployment benefits last week.

European markets held onto small gains in afternoon trading. Germany’s DAX was little changed while France’s CAC 40 increased 0.4%. The FTSE 100 gained 0.5% in London.

US stock futures shed some gains after the report posted. Dow futures were up 115 points, or 0.6%. S&P 500 futures are 0.5% higher, while Nasdaq futures have climbed 0.4%.

Economists surveyed by Reuters estimate that 3.5 million people filed initial unemployment claims last week.

But the number was much higher than expected. More than 6.6 million workers filed for their first week of unemployment benefits in the week ending March 28, according to US data.

That is double the previous record, set a week earlier, of 3.3 million unemployment claims.

Investors will get another indication of the damage done to the US labor market on Friday, when the government publishes its jobs report for March.

Asian markets closed mixed before the weekly US unemployment data was released. Japan’s Nikkei 225 fell 1.4% on Thursday after suffering heavy losses in the previous trading session. Hong Kong’s Hang Seng added 0.4% and the Shanghai Composite increased 1.7%.

Kevin Giddis, the chief fixed income strategist at Raymond James, said in a research note on Wednesday that investors are still getting to grips with a wave of sobering news about the coronavirus, and realizing the economic recovery may take much longer than expected.

“The data suggests that we may be in for a long spring and possibly still dealing with it in the summer,” he wrote in a research note. Investors, he said, should “keep in mind that [market] volatility is likely to be with us for a while and that days of extreme highs and lows may be part of what could be a called a ‘normal trading pattern.’ “

Crude oil futures moved sharply higher on Thursday after President Donald Trump said he expected Saudi Arabia and Russia to quickly end a price war that has put US shale producers under huge pressure.

US crude jumped 9% to trade at $22.20 a barrel. Brent crude, the global oil benchmark, gained nearly 10% to trade at $27.01 a barrel. Both varieties of crude oil lost roughly half their value last month after Saudi Arabia said it would abandon efforts to restrict supplies.