On a rough day for the Dow Jones, risk-off conditions made themselves apparent across the board.
Jobless claims came in well above 1 million filings again. Wall Street fears the data could get worse. If the nation’s top infectious disease expert is right, more lockdowns might be necessary.
Tech stocks resisted the downward pressure, but several of the Dow’s most prominent names suffered substantial pullbacks.
The rock-solid Nasdaq recovered from some mid-session volatility to record another gain, but the Dow and S&P 500 weren’t so lucky.
Here’s where the three indices stood at 3:22 pm ET:
On the data front, initial jobless claims came in slightly below estimates after several straight weeks of overshooting expectations.
Despite the beat, it’s difficult to get excited about 1.314 million Americans filing first-time unemployment claims this deep into the reopening.
Unsurprisingly, the stubborn elevation in claims data has economists concerned.
James Knightley of ING worries the figure won’t get better “anytime soon”:
Unfortunately, we don’t expect to see meaningful declines from these huge numbers anytime soon. High-frequency data from Homebase suggest that employment gains are already plateauing as the spike in Covid-19 cases has led several states to announce renewed containment measures while other states delay their phased re-opening.
Things may be about to get even worse for Dow bulls looking for a V-shaped recovery.
The White House’s leading disease expert, Dr. Anthony Fauci, suggested that states with significant outbreaks should consider locking down again.
This could put California – the country’s largest state economy – in the cross-hairs. The government is bracing for a surge in hospitalizations, while Los Angeles County officials said the region had reached a “critical juncture.”
Today’s 3% slide in the price of crude oil suggests that markets are taking the possibility of more lockdowns seriously.
Another headline making the rounds that weighed on risk sentiment was the Supreme Court ruling on President Donald Trump’s taxes. While New York prosecutors may not get those records before the election, the ruling adds another layer of uncertainty to Trump’s already precarious reelection fight.
On a rough day for the Dow 30, there was plenty of volatility among the individual stocks.
Boeing has endured a flurry of bad headlines since last March, and this week brought shareholders two more. About the same time the mighty 737 MAX order book took another cancellation hit, news broke that the FAA is investigating Boeing’s behavior toward plane inspectors.
BA stock fell by nearly 4% amid the continued pressure.
Fellow defense contractor Raytheon Technologies tumbled 4.4%, but Walgreens was easily the worst-performing stock in the index.
Hopes were high that the pharmacy chain would fare better during the pandemic, but a quarterly loss and layoff announcements sent the stock 8% lower.
Shining in the green were the handful of usual suspects. Defensive name Walmart rallied 2.75%, and tech stocks kept on chugging higher. Apple and Microsoft rallied about 0.5%, while Cisco Systems led all DJIA tech stocks with a 2.4% gain.