U.S. Stocks Slip as Jobless Claims Edge Up
By Anna Hirtenstein
U.S. stocks fell again Thursday, following data showing hundreds
of thousands of Americans continue to tap jobless claims in the
midst of the coronavirus pandemic.
The data helped drag the S&P 500 down 0.1% in early-morning
trading. The Dow Jones Industrial Average also fell 0.1%, or about
40 points, while the Nasdaq Composite swung between small gains and
Thursday's moves follow a 2.4% drop for the S&P 500 on
Wednesday, knocking the benchmark down to its lowest level in
almost two months. Losses continue to pile up, putting the stock
market's rally since March on hold as investors fret over whether
the U.S. government will funnel further stimulus aid into the
At the same time, coronavirus infections continue to rise in
many parts of the world, including the western U.S. The
presidential election campaign season is fueling volatility:
President Trump on Wednesday wouldn't commit to a peaceful transfer
of power after the November vote. He predicted that the outcome
would be decided by the Supreme Court, a reason he wants to quickly
fill the vacancy left by the death of Justice Ruth Bader
Federal Reserve officials on Wednesday stepped up calls for
additional fiscal relief to bolster the economy. Chairman Jerome
Powell and his colleagues said Congress and the White House, more
than the Fed, had the power to hasten a faster recovery.
"America sneezes and the rest of the world catches a cold: if
you're being told that the world's largest economy will not recover
without stimulus and they can't agree on a stimulus, then that has
to be a negative piece of news," said Tony Yarrow, a multiasset
fund manager at Wise Funds. "The mood among investors is extremely
pessimistic at the moment."
Mr. Powell is scheduled to offer congressional testimony in
Capitol Hill for a third day this week and will speak Thursday
morning. He is expected to give an overview of the economy and
monetary policy, which could provide clues into the central bank's
actions going forward.
In bond markets, the yield on the benchmark 10-year Treasury
edged down to 0.664%, from 0.676% on Wednesday.
The latest data on new jobless claims for the week ended Sept.
18 showed that the number of workers applying for jobless benefits
rose to 870,000, compared with 866,000 last week.
"This week's rise in initial jobless claims will come as a
surprise to the market," said Richard Flynn, U.K. managing director
at Charles Schwab. "Despite some encouraging numbers in recent
weeks, the level of weakness remains unprecedented, and the labor
market's recovery will likely rely on further fiscal support from
Daily new coronavirus cases in the U.S., which began to trend
downward in mid-July, have also been going up since mid-September
in a worrying sign for investors.
The timeline for a coronavirus vaccine being widely available
also remains unclear: Dr. Anthony Fauci, the nation's top
infectious-disease expert, expects to see data from Phase 3
clinical trials of some candidates indicating whether the vaccines
are safe and effective by "November or December" of this year.
In contrast, Mr. Trump has repeatedly claimed that a vaccine
will be available before the early November elections. On
Wednesday, he appeared to criticize forthcoming Food and Drug
Administration guidelines being developed around the release of a
vaccine, adding to concerns that the health issue was being
Overseas, the pan-continental Stoxx Europe 600 dropped 1.1% as
investors weighed the prospect of stringent measures being
introduced in countries such as Germany, France and the U.K.
following a rise in infections.
"We all assumed restrictions would be over by September, but it
turns out that we're in September and we're being promised another
six months of dislocation," said Mr. Yarrow. "Everyone's having to
reset their expectations."
In Asia, major benchmark stock indexes closed lower as the
negative sentiment spread overnight. The Shanghai Composite Index
retreated 1.7%, and Hong Kong's Hang Seng Index fell 1.8%.
-- Michael Wursthorn contributed to this article.
Write to Anna Hirtenstein at email@example.com
(END) Dow Jones Newswires
September 24, 2020 10:11 ET (14:11 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.