Stocks under pressure after rising jobless claims, all eyes on Washington’s stimulus efforts

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U.S. stocks slipped Thursday after data showed no real improvement in weekly unemployment data, with coronavirus cases still rising in many states, although Republicans in the Senate and the White House reported progress towards agreement on another financial assistance program for businesses and households hit by a pandemic.
The S&P 500 Index looked likely to end a four-day rally as tech stocks, led by Microsoft, Amazon and Apple, all fell.

The Dow Jones Industrial Average US: DJIA
was trading down 87 points, 0.3%, to nearly 26,918, while the S&P 500 US Index: SPX
was off 14 points, 0.4%, trading near 3262. The Nasdaq US Composite Index: COMP
was about 137 points or 1.2% lower, near 10,569.

Le Russell 2000 US: RUT
, which tracks small-cap companies, was 0.9% higher on the day and more than 2% so far this week, compared to a weekly gain of 0.9% for the Dow, an increase 1.5% for the S&P 500 and a 1.8% gain for the Nasdaq. The outperformance of smaller companies suggests investor fatigue towards the larger, more expensive mega-cap stocks. On Wednesday, the Dow Jones jumped 165.44 points, or 0.6%, to end at 27,005.84, its highest close since June 9, according to Dow Jones Market Data. The S&P 500 gained 18.72 points, or 0.6%, to close at 3,276.02. The Nasdaq Composite Index added 25.76 points, or 0.2%, ending at 10,706.13.

What drives the market?

Stocks fell on Thursday, led by tech stocks, despite a number of stories that may encourage bullish investors to take more risk.
Republicans in the Senate and the White House have reached a deal on a $ 1 trillion coronavirus relief package, as a $ 600 weekly unemployment benefit supplement will expire at the end of this month. The proposal sets the stage for further talks between Republicans and Senate Democrats, who have rallied around a $ 3.5 trillion bill that passed the House in May, but analysts believe that the negotiations will remain tense.
Meanwhile, investors analyzed a publication of the Department of Labor’s weekly employment benefits claims, which showed 1.42 million Americans had claimed benefits for the first time, an increase of 109,000 and the first increase since the end of March.
The report has become one of the key state measures of the COVID-19 pandemic which has recently resumed in many states, forcing the reimposition of restrictions to curb the spread of the deadly disease.
Market players analyze barrage of earnings, including trio of Dow components including Intel US: INTC
, Travelers Cos. United States: TRV
, and Dow Inc. United States: DOW

The reports come after electric vehicle maker Tesla produced optimistic results, which posted its fourth consecutive profit thanks to more than $ 400 million in electric vehicle tax credits, paving the way for the popular company to join. the S&P 500.
So far, investors have ignored growing tensions between the United States and China, with Beijing promising to shut down the U.S. consulate in southwest China’s Chengdu city, according to the South China Morning Post. The move comes after the United States ordered the closure of a Chinese consulate in Houston, citing fraud and espionage, highlighting growing tensions between the world’s superpowers.
In coronavirus news, the United States now has 3.9 million cases and 143,000 deaths, according to data aggregated by Johns Hopkins University.
A “trifecta” of factors – fiscal stimulus, encouraging news on the prospect of a COVID-19 vaccine and better-than-expected economic news – helped lubricate markets earlier in the pandemic, said Michael Stritch, director investments at BMO Wealth Management.
But more recently, Stritch said in an interview, “the virus has reasserted itself. Our point of view had always been that we would have some sort of wavy recovery. And yes, we need more on the fiscal front now. From a market perspective, this is a push and pull where bad economic data can ignite a bit of fire under Congress to act faster.
Like many other observers, Stritch sees markets likely to remain “aggressively flat” for the foreseeable future, until there is more clarity on a treatment.
A major U.S. economic indicators report, released at 10:00 a.m. Eastern Time, increased in June, but indicated the economy would likely remain in recession.
See:The stock market no longer thinks it needs the economy if it has the Fed, ”says David Rosenberg

What stocks are targeted?
  • Actions of Southwest Airlines Co.
    United States: LUV
    took off, up 1.6%, offsetting earlier losses, after the airline reported a smaller-than-expected significant loss as the drop in passenger demand was not as severe as expected.
  • Hershey Co. United States: HSY
    said on Thursday it had second quarter net income of $ 268.9 million, or $ 1.29 per share, from $ 313.3 million, or $ 1.48 per share, the year before . Shares jumped over 4.5%.
  • Actions of Dow Inc. United States: DOW
    fell 3.3% on Thursday, after the materials science firm swung to a slightly larger-than-expected loss, but said revenue fell less than expected.
  • Actions of Quest Diagnostics Inc.
    United States: DGX
    were down 1.8%, although the diagnostic test provider reported second quarter profit that declined less than expected as the rapid expansion of COVID-19 testing helped revenue exceed expectations, but provided online outlook.
  • Actions of Voyageurs Companies Inc. United States: TRV
    shares fell 3.3% on Thursday, after the insurer fell to a larger-than-expected loss in the second quarter, but net written premiums beat expectations.
  • Groupe American Airlines Inc. United States: AAL
    posted a big loss for the second quarter as travel was decimated by the coronavirus pandemic. Shares rose nearly 9%, reversing early losses.
  • Shares of parent company Kleenex Kimberly-Clark Corp.
    United States: KMB
    surged after the company reported earnings that exceeded analysts’ expectations.
  • Microsoft Corp. United States: MSFT
    closed a record year on Wednesday with a record quarterly turnover, but shares fell 2%.
  • Actions of Twitter Inc. United States: TWTR
    rose more than 6% imidday after the company fell short of revenue expectations but saw a sharp increase in user growth.
How are other markets traded?

In Europe, the Stoxx 600 Europe XX: SXXP index
was up slightly, while the UK’s FTSE UK: UKX
fed 0.1% higher.
Futures or US: GCQ20
rose 1.6% to $ 1,894.30 an ounce Thursday on the New York Mercantile Exchange, on track for a new record. September futures for US benchmark US crude: CLU20
shot higher, up 0.3% to $ 42.04 a barrel despite concerns about rising inventories.
10 Year T-Bill Pays BX: TMUBMUSD10Y
fell about two basis points to 0.581% after the release of the jobless claims report. Yields move in the opposite direction of prices.
In currency markets, the dollar fell 0.4% against its six main rivals, according to the ICE US dollar index: DXY
.
In Asia, the Nikkei JP: NIK
closed 0.6% lower, at 22,751.61, while China’s CSI 300 gauge XX: 000300
was virtually unchanged at 4,712.44. Hong Kong HK Hang Seng Index: HSI
rose 0.8% to close at 25,263.
See:Gold futures rally intensifies, prices tease record settlement

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