US Stocks Sink as Tech Stocks Extend Recent DeclineThe S&P 500 Financials Index fell 1.4%, a day after the Federal Reserve pledged to keep interest rates low for a prolonged period.
The major U.S. stock indexes were down sharply again on Thursday as technology-related shares extended a recent decline and as data showed high levels of weekly jobless claims. Tech-heavyweights Apple Inc and Amazon.com were the biggest drags on the S&P 500 and NASDAQ Composite, which entered correction territory earlier this month.
In the cash market, the benchmark S&P 500 Index settled at 3357.01, down 28.48 or -0.84%. The blue chip Dow Jones Industrial Average finished at 27901.98, down 130.40 or -0.47% and the tech-weighted NASDAQ Composite closed at 10910.28, down 140.19 or -1.25%.
US Economic News
The number of Americans filing new claims for unemployment benefits fell less than expected last week and applications for the prior period were revised up, suggesting the labor market recovery had shifted into low gear amid fading fiscal stimulus.
But jobless claims remained elevated at 860,000, while both housing starts and the Philadelphia Fed business index fell and trading marked a risk-off sentiment.
The Philly Fed came in at 15, matching the forecast, but coming in below the previously reported 17.2. U
Weekly Unemployment Claims were reported at 860K, higher than the 825K estimate, but lower than last week’s upwardly revised 893K.
Building Permits were 1.47 million units, lower than the 1.51m forecast and previously reported 1.48m.
Housing Starts showed a 1.42 million unit increase, missing the 1.47m forecast and 1.49m previous number.
Continued Reaction to Fed
The S&P 500 Financials Index fell 1.4%, a day after the Federal Reserve pledged to keep interest rates low for a prolonged period to lift the world’s biggest economy out of a pandemic-induced recession. Banks tend to benefit from higher borrowing costs.
Fed Chair Jerome Powell laid out a menu of factors – including wage growth, workforce participation and disparities in minority joblessness relative to whites – that must be satisfied before the Fed would view the economy at maximum employment, and thus even consider raising interest rates.
Stocks in the News
General Electric Co rose 3.7% after Chief Executive Officer Larry Culp said on Wednesday the company’s free cash flow would turn positive in the second half.
Ford Motor Co added 3.3% as it said it had begun production of the new generation F-150 pickup truck at its Michigan facility.
Declining issues outnumbered advancing ones on the NYSE by a 1.86-to-1 ratio; on NASDAQ, a 1.50-to-1 ratio favored decliners.
The S&P 500 posted 7 new 52-week highs and no new lows; the NASDAQ Composite recorded 36 new highs and 16 new lows, according to Reuters.
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