Stocks Fall, Led by Retreat in Technology Stocks
By Anna Hirtenstein
U.S. stocks slid Thursday even as fresh weekly data showed a
continued recovery in the labor market.
The S&P 500 fell 0.5% after it ground 0.1% higher on
Wednesday. The Nasdaq Composite dropped 0.8% with a retreat for
technology stocks. The Dow Jones Industrial Average fell 0.4%.
The latest figures on initial jobless claims showed that 385,000
people applied for unemployment insurance last week, a new pandemic
Investors said Friday's jobs report offers insights into the
recovery in the labor market, which Fed officials have said they
remain concerned about.
The U.S. nonfarm private sector added 978,000 jobs in May,
compared with 742,000 in April, according to a report Thursday from
ADP. This was significantly higher than economists had expected at
The major indexes have been sluggish this month as investors
weighed some signs that the economic rebound might slow or falter,
with snarled supply chains bolstering input costs for an array of
products. Concerns about high valuations for many stocks following
the monthslong rally in U.S. markets are also giving some investors
A Federal Reserve report on Wednesday noted a pickup in growth
as consumers return to restaurants and stores, but also said
supply-chain disruptions and acute labor shortages are leading to
"There is a continued focus on inflation and central banks and
when they taper," said Caroline Simmons, U.K. chief investment
officer at UBS Global Wealth Management. "If the labor market comes
in stronger than people are expecting, it will then raise the
debate that the economy is on track, job growth is good and
therefore we'll end up with wage increases and at some point,
Ahead of the market opening, AMC Entertainment Holdings slid
almost 7%, erasing its earlier gains, after the company filed with
regulators to sell more than 11 million new shares. "Under the
circumstances, we caution you against investing in our Class A
common stock, unless you are prepared to incur the risk of losing
all or a substantial portion of your investment," the company said
in the SEC filing.
Meanwhile, a handful of other stocks popular on online forums
continued to soar in frenzied trading. BlackBerry gained over 14%.
Sundial Growers was also among the other small stocks to see
outsize moves, climbing 9%.
"These are quite astonishing price reactions, but if something
goes up that much, it usually comes down again, as it's not based
on fundamentals," said Ms. Simmons. "These things usually don't end
well, it is very volatile and people can lose quite a lot of money
depending on when they go in and when the stock corrects."
Surveys of purchasing managers, slated to be released at 9:45
a.m., are expected to offer insights into the recovery of the U.S.
services industry in May, which was among the hardest-hit by the
lockdowns. Another gauge of services activity will also go out at
"We're seeing some peaking and plateauing of the data" as the
rate of change from the lows of the pandemic smooths out, said
Grace Peters, an investment strategist at J.P. Morgan Private Bank.
"This does lead to some indigestion in markets: We've seen equity
markets plateau over the last month, which is very much tied to
In bond markets, the yield on the benchmark 10-year Treasury
note ticked up to 1.611% from 1.591% on Wednesday. Yields rise when
Overseas, the pan-continental Stoxx Europe 600 pulled back from
a record high, easing down 0.6%.
In Asia, the major benchmarks ended trading on a mixed note. The
Shanghai Composite Index slipped almost 0.4%, while Japan's Nikkei
225 advanced 0.4%. Hong Kong's Hang Seng Index declined 1.1%.
Write to Anna Hirtenstein at firstname.lastname@example.org
(END) Dow Jones Newswires
June 03, 2021 09:47 ET (13:47 GMT)
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