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TOPLINE
The market opened lower on Thursday, with stocks falling for a second day in a row after another 1.1 million Americans filed for unemployment amid the coronavirus pandemic.
Disappointing economic data weighed on market sentiment.
Angela Weiss/AFP via Getty Images
KEY FACTS
The Dow Jones Industrial Average was down 0.6%, over 150 points, at Thursday’s open, while the S&P 500 fell 0.6% and the tech-heavy Nasdaq Composite lost 0.5%.
Sentiment took a hit from disappointing economic data: Jobless claims jumped to 1.1 million last week, more than the 920,000 expected, according to the Labor Department.
The sharp uptick from the 963,000 claims in the previous week shows just how vulnerable the labor market still is as the coronavirus continues to weigh heavily on the U.S. economy.
The market did pare back some of its early losses, however, after news of upcoming trade talks between the U.S. and China.
China’s commerce ministry announced on Thursday that trade officials from both sides would resume negotiations and review the phase one trade deal in the coming days.
Shares of chipmaker Nvidia, meanwhile, fell 1% despite the company reporting blowout second quarter earnings—with a 50% jump in revenue not enough to boost the stock on Thursday.
Key background
The S&P 500 finished at a record closing high on Tuesday, officially ending the 2020 bear market. The index briefly hit a new intraday record high on Wednesday, but stocks turned negative late in the day after the Federal Reserve released the minutes from its July meeting. Fed officials said that the coronavirus pandemic will continue to “weigh heavily” on the U.S. economy, which continues to remain “well below” of its pre-pandemic levels.
Big number: 28 million
That’s how many people are receiving some form of government unemployment benefits, according to the Labor Department.
Crucial quote
“Even amidst the worst labor market in modern history, Congress has not agreed to extend emergency unemployment benefits or the moratorium on evictions… politicians should focus on Main Street,” says Ron Temple, head of U.S. equity at Lazard Asset Management. “The absence of $17 billion per week of jobless benefits as well as protection from eviction is likely to cause negative repercussions for the broader economy if not corrected.”
What to watch for
A great deal of uncertainty still remains around the next coronavirus stimulus bill in Washington: Treasury Secretary Steven Mnuchin recently criticized top Democrats for failing to “strike a reasonable deal,” but also suggested that talks could resume this week.
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