- The Dow Jones Industrial Average plunged 332 points on Thursday.
- Jobless claims rose unexpectedly last week, a sign the economic recovery was losing steam.
- Congress still hasn’t made any headway on a new Covid-19 stimulus package.
The Dow and broader U.S. stock market tumbled on Thursday after government data showed an unexpected rise in weekly jobless claims, highlighting the challenges of a post-pandemic recovery.
Dow, S&P 500, Nasdaq Plunge
All of Wall Street’s major indexes recorded sharp declines after the open, mirroring a volatile pre-market for U.S. stock futures. The Dow Jones Industrial Average declined by as much as 332 points, extending a loss of more than 150 points during the previous session.
The broad S&P 500 Index of large-cap stocks declined by 0.9%, with ten of 11 primary sectors recorded losses. Energy stocks posted the biggest declines, falling 2.5% as a sector.
Meanwhile, the technology-focused Nasdaq Composite Index fell by 1%.
Jobless Claims Rise Unexpectedly
The number of Americans filing for first-time unemployment benefits crept higher last week, raising concerns about a fragile economic recovery six months after the first Covid-19 lockdowns were implemented.
Jobless claims rose by 43,000 to a seasonally adjusted annual rate of 898,000 for the week ended Oct. 10, the Department of Commerce reported Thursday. Analysts were forecasting a decline to 830,000. Watch the video below for more analysis:
Claims have been above 800,000 for seven consecutive weeks, reflecting a steady stream of layoffs amid the pandemic. The good news is that continuing claims continued to trend lower, as the number of Americans still receiving benefits fell 1.17 million for the week ended Oct. 3.
A fragile economic recovery is one reason why lawmakers are scrambling to pass a new Covid-19 stimulus bill. Talks stalled again this week after Democrats rejected President Trump’s $1.8 trillion relief package.
On Tuesday, Senate Majority Leader Mitch McConnell said he would push for a new vote when the full Senate returns next week:
When the full Senate returns on October 19th, our first order of business will be voting again on targeted relief for American workers, including new funding for the PPP. Unless Democrats block this aid for workers, we will have time to pass it before we proceed as planned to the pending Supreme Court nomination as soon as it is reported by the Judiciary Committee.