The Dow Closes Down 102 Points Due Partly To Rising Unemployment In The US

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U.S. stocks finished lower Thursday, with investors pointing to elevated tensions between Washington and Beijing and a stream of poor economic data, including another 2.4 million job losses on week, as contributors to lackluster buying mood on Wall Street.

How did benchmarks fare?

The Dow Jones Industrial Average DJIA, -0.41% fell 101.78 points, or 0.4%, at 24,474.12, while the S&P 500 index SPX, -0.77% ended off 23.10 points, or 0.8%, at 2,948.51. The Nasdaq Composite Index COMP, -0.97% fell 90 points or 1% to end at 9,284.88.

All three of the major benchmarks are on track for weekly gains of around 3%, with the S&P 500, up 3%, and Dow, rising 3.3%, on pace for their best weeks since the week ended April 8.

What drove the market?

Markets failed to mount a substantial charge in either direction on Thursday, with investors contending with the tug and pull between some optimism around state reopenings, and weak economic reports and mounting animosities between China and the U.S.

On Thursday, the Labor Department report showed 2.44 million people sought unemployment benefits in the week ended May 16 on an adjusted basis, bringing the total number of Americans out of work during the COVID-19 pandemic to nearly 40 million, or nearly 20% of the labor force, on a seasonally adjusted basis. That was slightly higher than the consensus among economists surveyed by MarketWatch.

Katie Stockton, founder and managing partner of Fairlead Strategies, said that investors are torn between the grim reports and the prospect that stock values could pick up steam before the economy catches up. “The fear of missing out can be a driver of momentum, right or wrong,” told MarketWatch in an interview.

The technical analyst warned that the gains for equities thus far can become “a potential contrarian positive for the market if participants feel underinvested and like they need to chase returns.”

Stocks traded under pressure for most of the session as President Donald Trump tweeted late Wednesday that China’s “disinformation and propaganda attack on the United States and Europe is a disgrace,” while the White House issued a broad attack on Beijing’s economic policies, military buildup, and human rights violations.

While Stockton sees some positives for the market, including attempts at cyclical rotation, and a few technical benchmarks exceeded, “on an intraday basis anything goes,” she said. “That’s the new normal, the sensitivity to headlines.”

— Market Watch

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