Wall Street set to extend slide as jobless claims top 1 million again

Wall Street’s main indexes were set to open lower on Thursday after weekly jobless claims rose unexpectedly back above the 1 million mark last week, lending weight to the Federal Reserve’s view of a difficult road to economic recovery.

The S&P 500 and the Nasdaq had retreated from their peaks on Wednesday after minutes from the Fed’s latest policy meeting showed the labor market’s swift rebound in May and June had likely slowed and policymakers would stick with aggressive stimulus measures for a much longer period.

The number of Americans filing for a new claim for unemployment benefits rose to 1.106 million in the week ended Aug. 15 after slipping below the 1 million level for the first time since the start of the pandemic, in the prior week.

A separate report from the Philadelphia Fed showed business conditions index fell more than expected to 17.2 points in August from 24.1 points in July.

“In the short term, if the jobless claim numbers come out worse than expected, I could see that pushing Congress to get another stimulus package going, maybe put more priority,” said Jeffrey Corliss, managing director, partner at Connecticut-based RDM Financial Group at Hightower Securities Llc.

“The Fed minutes brought a reality check that they’re seeing things out there (that) they’re concerned about.”

Despite signs that parts of the economy were still far away from pre-pandemic levels, the benchmark S&P 500 index completed its fastest recovery from a bear market this week, joining the Nasdaq in scaling new peaks.

Unprecedented fiscal and monetary support and gains in heavyweight technology companies have helped Wall Street’s main indexes dramatically recover from their March trough. Still, the Dow is more than 6% below its February high.

At 8:41 a.m. ET, Dow e-minis were down 104 points, or 0.38%, S&P 500 e-minis were down 13.25 points, or 0.39% and Nasdaq 100 e-minis were down 23.5 points, or 0.21%.

Nvidia Corp slipped 0.9% in premarket trade after results from the data center business of the rising semiconductor industry star disappointed some investors.

Intel Corp rose 3.0% after announcing a $10-billion share buyback plan.

L Brands Inc rose 4.0% after reporting a surprise quarterly profit, boosted by strong demand for Bath & Body Works’ products as well as higher online sales of Victoria’s Secret lingerie.

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