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S&P 500, Dow slip as labor market recovery falters

S&P 500, Dow slip as labor market recovery falters

FILE PHOTO: The New York Stock Exchange is pictured in the Manhattan borough of New York City, New York, U.S., November 10, 2020. REUTERS/Carlo Allegri

REUTERS: The S&P 500 and the Dow edged lower on Thursday as new coronavirus restrictions and an unexpected rise in weekly jobless claims raised fears of stalling economic growth in the absence of new stimulus measures.

The report from the Labor Department, the most timely data on the economy's health, also showed at least 20.3 million people on unemployment benefits at the end of October, seven months after the pandemic hit the United States.

"What was a decline in jobless claims numbers for the last couple of months has suddenly reversed course, so that only plays into the current theme of the economy getting worse," said Kenny Polcari, managing partner at Kace Capital Advisors in Florida.

The S&P 500 index was set for its third straight session of losses, retreating further from its record closing high hit on Monday following positive data on a coronavirus vaccine.

Investors have also become wary of the economic damage inflicted by tightening business restrictions as COVID-19 cases continue to climb.

New York City's public school system, the nation's largest, stopped in-classroom instruction from Thursday, as the U.S. death toll from COVID-19 passed a grim milestone of 250,000.

"Stimulus will be the key," said Joe Saluzzi, co-manager of trading at Themis Trading in New Jersey.

"Even a smaller package, half a trillion, will be well received and that's the right trick to keep certain businesses open and keep people paying their rent before the vaccine starts coming in."

Market participants are now looking to the Federal Reserve for signs it could step in with fresh monetary stimulus.

At 12:05 p.m. ET, the Dow Jones Industrial Average was down 0.41per cent and the S&P 500 was down 0.13per cent.

The Nasdaq Composite gained 0.55per cent, with technology mega-caps Tesla Inc, Alphabet Inc and Amazon.com Inc rising between 0.4per cent and 3.1per cent.

Value stocks, which include banks and industrials, slipped 0.6per cent, while growth-linked stocks, which are perceived to be less risky, logged small gains.

The Dow Jones transportation and industrials indexes shed 0.9per cent and 0.2per cent, respectively, after each hit an all-time high on Wednesday.

L Brands Inc surged 14.5per cent after posting better-than-expected quarterly results, helped by record sales growth at Bath & Body Works and higher demand for Victoria's Secret lingerie.

Nvidia Corp slipped 1.2per cent after company executives said data center chip sales would fall slightly in the fourth quarter.

Declining issues outnumbered advancers 1.25-to-1 on the NYSE; on the Nasdaq, advancers matched decliners.

The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded 64 new highs and six new lows.

(Reporting by Sruthi Shankar and Shivani Kumaresan in Bengaluru; Editing by Sagarika Jaisinghani and Shounak Dasgupta)

Source: Reuters

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