Stocks are falling on Wall Street in early trading today, extending the market’s pullback this week as optimism that Congress will deliver another round of stimulus for the economy wanes and new data show another weekly surge in the number of Americans seeking unemployment aid.
The S&P 500 was down 0.9%. The benchmark index is now on track for its first weekly loss in three weeks. The selling was widespread, with technology, health care and companies that rely on consumer spending driving the decline. The pullback follows a broad sell-off in markets overseas as rising infections in Europe led governments in France and Britain to impose new measures to contain the coronavirus. Treasury yields were mixed, while the price for U.S. crude oil headed lower.
The Dow Jones Industrial Average was down 226 points, or 0.8%, to 28,288 as of 9:15 a.m. Central time. The Nasdaq composite dropped 1.3%. The Russell 2000 index of small-cap stocks was off 0.9%.
Stocks have been mostly climbing this month, but have pulled back this week as talks between Democrats and Republicans in Washington over another economic stimulus package drag on, dimming investors’ hopes for a deal that can deliver more aid for the U.S. economy in the near term.
The government’s latest weekly tally of unemployment aid claims underscores how the economy continues to be hobbled by the pandemic and recession that erupted seven months ago. The Labor Department said Thursday that the number of Americans seeking unemployment benefits rose last week to 898,000, a historically high number that exceeds analysts forecasts.
The report follows recent data that have signaled a slowdown in hiring. The economy is still roughly 10.7 million jobs short of recovering all the 22 million jobs that were lost when the pandemic struck in early spring.
The 10-year Treasury yield was down to 0.71% from 0.73% late Wednesday.
Investors continued to weigh the latest batch of earnings reports from major U.S. companies. Several reports so far have been better than expected, but the health crisis continues to cloud the outlook.
United Airlines slumped 4.4% today after reporting that its revenue plummeted over the summer. Morgan Stanley was up 0.6% after the investment bank said its third-quarter profit jumped 25% thanks to a surge in trading revenue and higher fees. Walgreen Boots Alliance rose 2.5% after the drugstore chain’s latest quarterly results topped Wall Street’s forecasts.
Across the S&P 500, analysts are expecting companies to report another drop in profits for the summer from year-ago levels. But they’re forecasting the decline to moderate from the nearly 32% plunge from the spring as the economy has shown signs of improvement.
A resurgence in coronavirus infections in Europe has also given investors cause to turn cautious. Fears are rising that Europe is running out of chances to control the new outbreak, as infections hit record daily highs in Germany, the Czech Republic, Italy and Poland. France slapped a 9 p.m. curfew on many of its biggest cities and Londoners face new travel restrictions as governments take increasingly tough actions.
The limits on public life are not as strict as the full lockdowns imposed during the spring, but will stunt or even reverse the economy’s recovery from recession, experts say.
European markets fell broadly after France imposed a curfew on many of its biggest cities and Londoners faced new travel restrictions. Germany’s DAX lost 2.9%. The CAC 40 in France slid 2.5%. The FTSE 100 in London fell 2.2%.
In Asian trading today, the Shanghai Composite Index lost 0.3% to 3,332.18 and the Nikkei 225 in Tokyo sank 0.7% to 12,827.82. The Hang Seng in Hong Kong lost 2.1% to 24,154.15.
The Kospi in Seoul shed 0.8% to 2,361.21 despite a strong market debut by the company that manages popular South Korean boy band BTS. The group faces criticism by Chinese internet users after its leader thanked Korean War veterans for their sacrifices.
Big Hit Entertainment Ltd.’s share price doubled by midday but ended the day close to its opening. Its market value after an initial public offering that raised more than $800 million was about $7.5 billion.
In Sydney, the S&P-ASX 200 gained 0.5% to 6,210.30 while India’s Sensex lost 1.2% to 40,293.61.
Thailand’s benchmark lost 1.5% after the government declared a “severe state of emergency” following a rally Wednesday by protesters demanding democratic change.