US stocks bounce despite surge in US jobless claims amid Covid-19 shakeout

Wall Street bounced last night as hopes of a truce between Saudi Arabia and Russia to cut oil output drove a record 22% surge in prices, outweighing the shock of over 6 million Americans filing for jobless claims due to virus-led lockdowns.

The S&P energy index, down by half this year, climbed 10%, with big gains for majors Exxon Mobil and Chevron powering a near 2% rise for both the S&P 500 and the Dow Jones.

Saudi Arabia has called for an emergency meeting of oil producers, while US president Donald Trump said he expected the kingdom and Russia to cut output by as much as 10 million to 15 million barrels a day.

“The surge in crude is helping the mood, so we’re seeing some relief in markets that have been hammered,” said Richard Steinberg, chief market strategist at Colony Group.

A bump in prices may still not be enough to save some of the debt-laden US shale companies that are on the brink of bankruptcy as demand continues to plunge, wrought by the coronavirus pandemic.

Meanwhile, initial claims for unemployment benefits last week rose to 6.65 million, exceeding the top end of economists’ estimates at 5.25 million.

“They are really eye popping numbers, but at the end of the day it doesn’t really tell the whole story because we knew they were going to be bad,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management.