Markets

U.S. Stocks Close Mostly Lower On Disappointing Jobs Data

(RTTNews) - After coming under pressure early in the session, stocks remained mostly lower throughout the trading day on Thursday. With the drop on the day, the Dow and the S&P 500 gave back ground after ending the previous session at their best closing levels in over a month.

The major averages all closed in negative territory but well off their lows of the session. The Dow fell 135.39 points or 0.5 percent to 26,734.71, the Nasdaq slid 76.66 points or 0.7 percent to 10,473.83 and the S&P 500 dipped 10.99 points or 0.3 percent to 3,215.57.

The weakness on Wall Street came following the release of a report from the Labor Department showing the decline in first-time claims for unemployment benefits nearly ground to a halt last week.

The Labor Department said initial jobless claims slipped to 1.300 million in the week ended July 11th, a decrease of just 10,000 from the previous week's revised level 1.310 million.

Economists had expected jobless claims to drop to 1.250 million from the 1.314 million originally reported for the previous week.

Jobless claims fell for the fifteenth consecutive week, although the pace of decline has slowed considerably from April and May.

The negative sentiment was partly offset by a report from the Commerce Department showing another substantial increase in retail sales in June, although the data was seen as old news as some states roll back their reopening plans due to a surge in coronavirus cases.

The report said retail sales soared by 7.5 percent in June after skyrocketing by an upwardly revised 18.2 percent in May.

Economists had expected retail sales to jump by 5.0 percent compared to the 17.7 percent spike originally reported for the previous month.

Excluding sales by motor vehicles and parts dealers, retail sales still shot up by 7.3 percent in May after soaring by 12.1 percent in May. Ex-auto sales were also expected to surge up by 5.0 percent.

A steep drop by Bank of America (BAC) also weighed on the markets, with the financial giant tumbling by 2.7 percent.

Bank of America came under pressure after reporting better than expected second quarter earnings but also setting aside another $4 billion for coronavirus-related loan losses.

On the other hand, shares of Morgan Stanley (MS) moved sharply higher after the investment firm reported better than expected second quarter results.

Sector News

Airline stocks pulled back sharply after turning in some of the best performances in the previous session, with the NYSE Arca Airline Index plunging by 3.9 percent. The index soared by 8.7 percent on Wednesday.

Significant weakness was also visible among software stocks, as reflected by the 1.7 percent slump by the Dow Jones U.S. Software Index.

Gold stocks also came under pressure on the day, moving lower along with the price of the precious metal. With gold for August delivery sliding $13.50 to $1,800.30 an ounce, the NYSE Arca Gold Bugs Index fell by 1.6 percent.

Commercial real estate, steel and oil service stocks also saw notable weakness, while strength among housing, utilities and computer hardware stocks helped to limit the downside for the markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slumped by 0.8 percent, while China's Shanghai Composite Index plunged by 4.5 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.7 percent, the French CAC 40 Index and the German DAX Index fell by 0.5 percent and 0.4 percent, respectively.

In the bond market, treasuries edged higher following the modest drop seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 0.612 percent.

Looking Ahead

Reports on housing starts and consumer sentiment may some attract attention on Friday but could be overshadowed by reaction to earnings news from Netflix (NFLX).

The streaming giant, which is releasing its second quarter results after the close of today's trading, was among the big-name tech stocks leading the recent rally by the Nasdaq to record highs.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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