Equities Gain Ground After US Jobless Claims Slow While Oil Prices Rally Higher

Stocks edged higher on Thursday after US claims for unemployment insurance slowed and oil prices continued to recover from the historic selloff seen earlier in the week.

The Dow Jones Industrial Average, Standard & Poor’s 500 and Nasdaq Composite were all higher for second day, with nearly all of the blue chips on the Dow in the green, with Dow (DOW) and Boeing (BA) among the gainers. Walmart (WMT) was down 1.1% as the S&P’s consumer staples group slipped 0.2%, defying a broader trend that saw nearly all the sectors on the benchmark gain.

In the week ended April 18, claims fell by 810,000 to 4.43 million, the Department of Labor said. The consensus on Econoday was for 4.25 million. Still, the insured unemployment rate jumped to 11% for the week ended April 11, the highest on record. Claims have narrowed for the past three weeks, the government data showed.

While the COVID-19 pandemic continues, some countries and regions are beginning steps toward reopening their economies that have been shut down during the outbreak, bolstering investor hopes for a recovery.

“Transitory sticker-shock to indicator estimates tends to get quickly shaken off as markets return toward being more forward looking in nature,” Derek Holt, vice president and head of capital markets economics at Scotiabank said in a note. “Stocks have rallied from the depths in anticipation of phased reopenings in European and North American economies over May and June.”

Energy shares gained 2.2% as crude prices continued to move higher after May contracts fell into negative territory earlier this week. West Texas Intermediate was up 21% to $16.64 a barrel while Brent was 9.2% higher at $22.24 a barrel. Apache (APA) gained 8.4%, Devon Energy (DVN) gained 7.5% and Marathon Oil (MRO) was 6.3% higher.

In company news Target (TGT) sank 4% as the retailer said its short-term profitability will be affected by COVID-19 with comparable store sales declining in the mid-teens so far in April, but digital was up 275%. Eli Lilly (LLY) was up 1.2% after the drugmaker reported better-than-expected quarterly results.

In morning trading, the S&P 500 and the Nasdaq were both up about 1% and the Dow was 0.8% higher.