New York (AP) — Stocks are swinging between losses and gains in early Thursday trading on Wall Street, as the number of layoffs sweeping the country remains stubbornly high.
The S&P 500 was 0.1% lower, as of 9:51 a.m. Eastern time, after clawing back from an early 0.8% drop and briefly rising to a small gain. They’re the latest erratic moves for a market that’s been dominated by volatility this month.
The Dow Jones Industrial Average was down 49 points, or 0.2%, at 26,713, and the Nasdaq composite was virtually flat
The market’s momentum has shifted with lightning speed recently, often changing direction by the hour. On Wednesday, the S&P 500 rose to a modest gain when trading began, only to end the day with a 2.4% slump. It’s down nearly 10% from its record set on Sept. 2.
Thursday’s headline report showed that 870,000 workers filed for unemployment claims last week. That’s slightly more than the prior week and a little higher than economists expected. The numbers come as investors are increasingly resigned to Congress not delivering more support for the economy, as many had been expecting, after extra unemployment benefits and other stimulus expired recently.
“Inaction speaks louder than words,” Morgan Stanley strategists wrote in a report. They no longer expect Congress to approve a meaningful stimulus package before the end of the year as part of its base case.
Stocks have slumped sharply this month in a turnaround following months of strong gains. Several reasons are behind the abrupt tumble, highlighted by worries that stocks simply grew too expensive following their record-setting run through the spring and summer.
Among other concerns weighing on markets are the upcoming U.S. elections, particularly after President Donald Trump’s refusal Wednesday to commit to a peaceful transition of power if he lost, and rising tensions between the United States and China.
Layered on top of it all is the still-raging coronavirus pandemic and the threat that worsening counts around the world could lead to more business restrictions.
It’s a stark shift from late March into early this month, when the S&P 500 soared 60% and more than recovered all its earlier losses on worries about the pandemic-caused recession. Still in investors’ favor is unprecedented support from the Federal Reserve, which is holding short-term interest rates at nearly zero and buying all kinds of bonds to support markets.
But Fed Chair Jerome Powell has said several times in testimony on Capitol Hill this week that the central bank can’t prop up the economy by itself and that the recovery likely needs more help from Congress. He’s due to testify again on Thursday.
Paralyzing partisanship has prevented a Congressional renewal of aid, and the recent vacancy on the Supreme Court caused by the death of Justice Ruth Bader Ginsburg has deepened the divide.
Much of the market’s weakness this month has centered on Big Tech, where critics said prices exploded too high even after accounting for the companies’ strong growth.
Amazon, Apple and others have seen their revenue continue to rise through the pandemic, as work-from-home and other trends that benefit them take deeper hold. But Amazon shares were up more than 90% for the year just a few weeks ago, for example.
On Thursday, Amazon drifted from losses to gains, while other Big Tech stocks were also mixed.
The yield on the 10-year Treasury dipped to 0.66% from 0.67% late Wednesday.
In Europe, Germany’s DAX lost 0.5%, and France’s CAC 40 fell 0.8%. The FTSE 100 in London dropped 1.2%.
In Asia, Japan’s Nikkei 225 fell 1.1%, South Korea’s Kospi tumbled 2.6% and Hong Kong’s Hang Seng dropped 1.8%. Stocks in Shanghai lost 1.7%.