Tech stocks defend downbeat data as dollar, global stock retreats

NEW YORK (Reuters) – The dollar weakened and global stock markets fell on Thursday, even as the tech-heavy NASDAQ index hit a record high and overlooked the growing signs of prolonged economic weakness. Gold rose also in a sign of buying safe haven.

FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London, Britain. 23 Aug 2018. REUTERS / Peter Nicholls

Economic concerns weighed on shares earlier in the day, reflecting on Wednesday the Federal Reserve’s concerns about the slaughter of the U.S. labor market as cases of U.S. coronavirus emergence.

That pessimism was reinforced Thursday by a surprise jump of more than $ 1 million in new U.S. claims for unemployment benefits, which sent broader stock indices lower.

The new reading of jobless claims was well above the forecast of economists surveyed by Reuters who expected 925,000 new applications last week.

“There’s always concerns about the economic recovery, which always hurts,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

But U.S. tech stocks hit the downbeat mood and extended their upward streak. The Nasdaq went to a fresh record high, led by gains in Apple Inc, Microsoft Corp and Tesla Inc.

The tech-heavy index is 15% higher than its pre-COVID peak in February, while the broad S&P 500 slipped from a new high set Wednesday, to below its previous peak also reached six months ago.

“The love for technology stocks grew as the favorite pandemic players, such as Apple and Tesla, saw strong demand,” said Edward Moya, senior market analyst at OANDA in New York, in a note. “Nobody wants to shortfall this market, so we see investors today simply turning back into technology stocks.”

The MSCI World Axis Index, which tracks equities in 49 nations, fell 0.3% to 570.18.

The Dow Jones Industrial Average rose 0.2%, the S&P 500 gained 0.3% and the Nasdaq Composite added 1.1%.

Oil prices, meanwhile, fell by about 1%, as worries about surpluses on raw supplies. The decline came after Reuters reported that some members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, would have to cut exports by an additional 2.31 million tonnes a day (bpd) to compensate for recent transition.

OPEC + had said on Wednesday that the recovery of the oil market was slower than expected with growing risks of a longer second wave of the pandemic.

US crude futures fell 0.8% to $ 42.58 a barrel. Brent crude futures regulated at $ 44.90 per barrel, 1% down.

The dollar had gained ground since hitting a 27-month low that hit it on Tuesday. On Thursday, the dollar index fell 0.168%, with the euro rising 0.13% to $ 1.1851.

The Japanese yen strengthened 0.22% against the greenback at 105.89 per dollar, while Sterling last traded at $ 1.3194, up 0.73% on the day.

Wall Street was demolished on Wednesday from its recent highs after minutes from the Fed of its July meeting spoke to investors by showing that the rapid rebound of the labor market in May and June was likely to slow.

The S&P 500 had reached an all-time high earlier in the week when prices returned to their pre-pandemic levels.

The sudden bearishness played out in Asian markets during the day and continued throughout the European session, although equities began to recover as the morning progressed.

PHILO PHOTO: A man using his mobile phone silhouettes against a stock ticket outside a Tokyo brokerage firm on February 21, 2006. REUTERS / Toru Hanai

Several Fed policymakers have said they may need to adopt monetary policy to help get the economy through the coronavirus pandemic.

Gold handball last night and to the U.S. unemployed data on demand to the safe haven.

Spot gold added 0.8% to $ 1,945.61 an ounce. US gold futures rose 1.2% to $ 1,946.50 per ounce.

Report by Alwyn Scott, Herbert Lash and Elizabeth Howcroft; Edited by Marguerita Choy and Steve Orlofsky

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