Stocks fell on Thursday after jobless claims in the US unexpectedly rose for the first time since March and tech stocks fell.
The Dow Jones Industrial Average fell 274 points, or 1.02%, to 26,731, the S&P 500 lost 1.03% and the Nasdaq fell 2.06%.
Dow (Dow) – Get reportMicrosoft (MSFT) – Get reportand apple (AAPL) – Get report They were leading the decline of the Dow.
The Labor Department said Thursday that first-time claims for unemployment benefits rose to 1,416 million in the week ending July 18. Economists expected claims of approximately 1.3 million.
US employers cut back on their efforts to reopen and rehire in the midst of new coronavirus outbreaks in various states and cities.
“The rise in jobless claims is a deeply troubling signal as weekly unemployment benefits of $ 600 are soon due for tens of millions of unemployed Americans,” said Glassdoor senior economist Daniel Zhao.
“The combined effect of increased layoffs, the expiration of unemployment benefits and the intensification of coronavirus outbreaks sets up a perfect economic storm that could easily derail the incipient recovery of the weakened economy.
Tesla rose slightly to $ 1,600 after the electric car maker topped profit and revenue estimates for the second quarter and said it could exceed 500,000 deliveries this year despite production interruptions from the coronavirus pandemic.
Twitter reported a higher-than-expected loss for its second quarter amid a drop in ad revenue. However, the shares rose 5.9% to $ 39.12, due to an increase in users and traffic.
Investors are also weighing the possibility of more government stimulus against rising tensions between the United States and China.
Beijing called Washington’s order to close its consulate in Houston a “unprecedented escalation” by the United States, and reports say Beijing was considering closing the US consulate in Wuhan or Chengdu in retaliation.
“The escalation in tensions between the United States and China is a reminder of the main risk investors face during the upcoming US election campaign,” said Stephen Innes, chief global market strategist at AxiCorp.
“The United States and China have become increasingly combative in their views this year. It is better for the markets to get used to it because there is more of that to come ”.
Meanwhile, Senate Republicans have resolved their differences with the White House in a fifth coronavirus relief package, The Wall Street Journal reported.
Negotiations with Democrats will begin only days before a weekly supplement of $ 600 to unemployment benefits expires on July 31.
Treasury Secretary Steven Mnuchin said Thursday that a payroll tax cut will not be part of the aid law.
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