Futures retreat ahead of jobless claims, business activity data

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© Reuters. A woman walks in the rain outside the New York Stock Exchange (NYSE) in the financial district of lower Manhattan during outbreak of coronavirus disease (COVID-19) in New York © Reuters. A woman walks in the rain outside the New York Stock Exchange (NYSE) in the financial district of lower Manhattan during outbreak of coronavirus disease (COVID-19) in New York

By Shreyashi Sanyal and C Nivedita

(Reuters) – U.S. stock index futures headed lower on Thursday as investors braced for another staggering jobless claims report and a plunge in business activity data as state-wide lockdown measures hammer economic growth.

Wall Street jumped on Wednesday on a recovery in oil prices and signs Congress was preparing nearly $ 500 billion more in relief for small businesses and hospitals. The bill is expected to clear the House of Representatives later in the day.

Still, the benchmark S&P 500 index () is 17% below its February record high as shutdowns sparked layoffs and crushed consumer spending.

Surveys on U.S. manufacturing and services firms are likely to mirror dismal readings from Asia and Europe issued earlier on Thursday.

Data is also likely to show a record 26 million Americans sought unemployment benefits over the last five weeks, confirming that jobs created during the longest employment boom in U.S. history were wiped out in about a month.

“(Markets) are learning that it is more efficient to react to data rather than trying to predict it,” said Chris Bailey, strategist at Raymond James in London.

“A lot of people are understanding that many of the jobless numbers may be temporary and when conditions go back to more normal ones, many people will return to previous jobs.”

At 7:57 a.m. ET, 1YMcv1> were down 52 points, or 0.22%. S&P 500 e-minis were down 0.25 points, or 0.01% and were up 1.75 points, or 0.02%.

The CBOE volatility index has retreated from 12-year peaks hit last month, but remains well above levels seen in the past two years.

Analysts have sharply cut their S&P 500 profit expectations for the first and second quarters, while companies launched dramatic cost-cutting measures to ride out the economic slump.

“Given that the global economy is breathing on life support, no one can be sure with a high level of certainty how equities and other asset classes will perform in the coming months,” said Hussein Sayed, chief market strategist at FXTM.

“What we know is volatility will stay with us for a while and that is the kind of ‘new normal’ we need to deal with over the forthcoming weeks and possibly months.”

Retailer Target Corp (N:) reported a surge in digital sales in March and April, which offset a slump in-store sales. But its shares fell 5% in premarket trading as margins continued to be hit by higher costs.

Bigger rival Walmart Inc (N:) also fell 1.2% and was the biggest decliner among Dow () components before the bell.

Eli Lilly and Co (N:) gained 1% as it raised its 2020 profit forecast, benefiting from customers stockpiling its medicines such as diabetes drug Trulicity during the pandemic.

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