Stocks muted as another 1.5M Americans file for unemployment
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Stocks finished virtually unchanged Thursday as fresh worries over coronavirus outbreaks in the U.S. and another wave of layoffs tempered hopes for a fast economic recovery from the pandemic.
The Dow Jones industrial average dipped 39.51 points to close at 26,080.10, recouping some losses after falling about 271 points in early trading. The Standard & Poor’s 500 ticked up 0.1% to end at 3,115.34, as gains in energy and technology stocks offset losses in real-estate companies.
Global markets have shown signs of weakness in recent sessions following a nearly 40% rally for U.S. stocks that began in late March. Discouraging numbers on the coronavirus in various U.S. states and elsewhere in the world have dented the optimism, along with weak unemployment figures.
About 1.5 million workers filed applications for unemployment benefits last week, the Labor Department said Thursday. That pushes the running tally of those who have made initial claims over the past 13 weeks to a 45.7 million. First-time claims are a reliable gauge of layoffs.
"New claims for unemployment benefits remain elevated at 1.5 million but have declined for 11 straight weeks. But the decline of just 58,000 feels less like an improvement than what we’d seen in previous weeks," Mark Hamrick, senior economic analyst at Bankrate, said in a note.
After weeks of trending upward, shares have retreated as rising numbers of cases in many places around the world have raised concern that even if governments don’t reimpose restrictions to curb coronavirus outbreaks businesses and consumers might refrain from spending much.
Given these realities, investors are recognizing that volatility may be the markets’ only certainty in coming months. Investors had been pushing up shares of companies that would benefit from a reopening economy in recent sessions like airlines, retailers and cruise liners. But those companies fell Thursday on worries of new outbreaks in coronavirus hotspots.
“Behavioral changes, such as wearing masks and social distancing, have kept those new infections at an acceptable level,” Brad McMillan, chief investment officer at Commonwealth Financial Network, said in a note. “If this continues to be the case, then the virus—from an economic and market standpoint—will become less of a factor going forward.”
Cruise operator Carnival fell to an early loss of 6.8% after it reported a $4.4 billion for the second quarter and said it can’t predict when it will return to normal operations. But it later recovered and briefly turned positive. It finished down 1.4%.
Stocks of smaller stocks have also tracked with investors’ expectations for the economy, and they likewise swung up and down Thursday. The Russell 2000 index of small-cap stocks ended the day virtually unchanged, up just 0.54 points to 1,427.08, after earlier bouncing between a gain of 0.9% and a loss of 1%.
The yield on the 10-year Treasury slipped to 0.69% from 0.73% late Wednesday. It tends to move with investors’ expectations for the economy and inflation.
A barrel of U.S. oil for delivery in July rose 2.3% to settle at $38.84. Brent crude, the international standard, rose 2% to settle at $41.51 per barrel.
European benchmarks lost ground, with Germany’s DAX losing 0.8% while the CAC 40 in Paris gave up 0.8%. Britain’s FTSE 100 lost 0.5%. In Asian trading, Japan’s Nikkei 225 shed 0.5% and the Hang Seng in Hong Kong edged 0.1% lower. The Shanghai Composite index gained 0.1%.
Contributing: The Associated Press