Stocks were mostly lower Thursday as Wall Street reacted to stronger-than-expected weekly jobless claims and ongoing concerns about the impact of the COVID-19 pandemic.
The Dow Jones Industrial Average fell 100 points, or 0.30%, to 34,926, while the S&P 500 dipped 0.25%, and the Nasdaq rose 0.01%.
The European Central Bank made modest — and expected — changes to the pace of its pandemic bond buying program, but kept its three main interest rates unchanged following a two-day policy meeting in Frankfurt.
Jobless claims data were also in focus, with new applications for unemployment benefits falling 35,000 to a new post-pandemic low of 310,000 over the week ending September 4.
“As the market struggles to snap out of its losing streak this week, the pandemic-era low for jobless claims could be a potential catalyst,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “Though with record job openings reported yesterday revealing that employers continue to face headwinds, and a lot riding on improvement on the jobs front for the Fed to take action, progress on the labor market is somewhat tricky to interpret.”
Further, he added, with the ECB making moves to slow down their asset purchasing program, “there’s no shortage of moving parts that could weigh on the market.”
“But this surprise on the downside for jobless claims is for sure a bright spot in terms of economic recovery,” Loewengart said.
The twin releases acted as a counterweight to signs of a pullback in the post-pandemic recovery and uncertainty linked to the policy path of major central banks around the world.
Video: ECB may have been ‘too pessimistic’ to begin with, Lagarde says (CNBC)
Slowing employment growth, as well as the ongoing surge in Delta-variant infections and limp consumer spending, set against the rich valuations of near-record high indices on Wall Street, has triggered a series of downgrades for near-term performance from major investment banks.
Morgan Stanley’s chief investment officer, Lisa Shalett forecast a correction of between 10% and 15% for U.S. stocks by the end of the year.
President Joe Biden will present a six-point plan to combat the highly-contagious Delta variant at a press briefing Thursday that could include mask mandates, testing and new policies for schools as COVID-19-related deaths rise past 1,500 for the first time since March and daily infections surging past 150,000 for the first time in more than a year.
Lululemon shares surged after the sports apparel retailer posted stronger-than-expected second quarter earnings and boosted its full-year profit outlook.
GameStop was off slightly after the video game retailer and meme stock investor favorite posted a wider-than-expected second quarter loss while remaining silent on plans to grow the struggling business over the second half of the year.
General Motors was also in the red after the carmaker extended the shutdown times of several north American plans amid the ongoing shortage in global semiconductor supplies and the recall of its Chevy Bolt battery.
Benchmark 10-year note yields slipped to 1.304%.
Oil prices slipped after the American Petroleum Institute reported a 4 million barrel decline in domestic crude stocks late Wednesday, but reverse course to take WTI October futures down nearly 2% at $67.94 per barrel after China said it would release some of its strategic reserves for public auction.
Tech and video game shares slumped lower in China amid reports that officials in Beijing have suspended the approval of new video game releases amid concerns for their affect on young people.
The South China Morning Post reported the suspension following a meeting with officials from Tencent Holdings and NetEase, two of the country’s biggest video game producers, that followed a ban on under 18s from playing the games for more than three hours a week.
This article was originally published by TheStreet.