U.S. Stocks Close Lower as Jobless Claims Remain Elevated
July 09 2020 - 4:32PM
Dow Jones News
By Karen Langley and Caitlin Ostroff
U.S. stocks dropped Thursday as investors continued to back away
from bets on a smooth reopening from the coronavirus shutdowns.
Fresh data showed that initial unemployment claims in the U.S.
remain elevated, and the number of confirmed new Covid-19 cases in
the U.S. hit a new single-day high Wednesday.
The S&P 500 pulled back Thursday, dropping 0.6% as of the 4
p.m. ET close of trading. Only its technology and consumer
discretionary sectors were in the green. The index has surged about
40% from its March low.
The Dow Jones Industrial Average fell about 360 points, or 1.4%,
recovering after briefly being down more than 500 points.
"I think the resurgence in the Covid-19 positive cases certainly
makes the markets worried," said Feifei Li, head of equities at
Research Affiliates. "They are concerned about the potential second
round of lockdown."
Investors continued to favor many of the megacap growth stocks
that have outperformed throughout the market turmoil. Gains by
Microsoft, Apple and Amazon helped the Nasdaq Composite rise 0.5%
to 10548. The tech-heavy gauge has established a wide lead over
other major indexes in 2020.
Analysts have attributed the stock market's resurgence from its
lows in part to broad fiscal and monetary stimulus efforts. But
they continue to parse new data that could reveal the strength of
economic recovery and the progression of the coronavirus
pandemic.
"It's not surprising, depending on some of the headlines that
scroll through at this time, you're going to have what we call
basically a choppy market," said Jack Janasiewicz, portfolio
manager at Natixis Investment Managers Solutions. "It's going to be
uneven. You're going to have fits and starts. The market seems to
focus on any sort of bad coronavirus news."
Figures Thursday showed initial unemployment claims edged down
last week to 1.3 million, extending a trend of gradual declines
from a peak in March. Last week's level remained well above the
highest week on record before this year.
As reopenings from the coronavirus shutdowns continue, the count
of confirmed new Covid-19 cases in the U.S. reached a new
single-day high of 60,000 on Wednesday, according to data from
Johns Hopkins University.
Shares of companies whose prospects are tied to the economic
reopening came under pressure. United Airlines Holdings, American
Airlines Group and Royal Caribbean Cruises each lost at least
5%.
With a flurry of new information related to the coronavirus and
the approach of the presidential election later this year, many
investors expect market volatility to continue.
"The cards are all still very much up in the air for the U.S.
economy and the U.S. stock market," said Sarah Henry, a portfolio
manager at Logan Capital Management who covers consumer
sectors.
Among individual stocks, shares of Walgreens Boots Alliance
dropped 8.1% after the drugstore chain reported a quarterly loss
and cited reduced traffic in U.K. stores. Bed Bath & Beyond
shares lost 25% after the home-goods chain said it would
permanently close about 200 stores.
Overseas, China's stock market zoomed higher for the eighth day
in a row, leading Asian indexes higher, while stocks in the rest of
the world wavered.
The Shanghai Composite rose 1.4% Thursday, extending a winning
streak that is now the longest since January 2018. Japan's Nikkei
225 Index was up 0.4% and Hong Kong's Hang Seng rose 0.3%.
"The day traders are actually a sizable part of the market,"
said Altaf Kassam, head of investment strategy for State Street
Global Advisors in Europe. He said the traders were looking at
signals of the government's support for the economy: "If anywhere
has had a V-shaped recovery, it's China."
The yield on the 10-year U.S. Treasury dropped to 0.607%, from
0.652% Wednesday. Yields fall as bond prices rise.
Write to Karen Langley at karen.langley@wsj.com and Caitlin
Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
July 09, 2020 16:17 ET (20:17 GMT)
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