U.S. stocks slid on Thursday as investors were discouraged by a worse-than-expected jobless claims reading as well as a gloomy forecast from Walmart.
The Dow Jones Industrial Average fell 210 points. The S&P 500 fell 0.8%, while the Nasdaq Composite slipped 1.3% as investors continued to rotate out of high-flying tech.
First-time filings for unemployment insurance totaled 861,000 last week, the highest level in a month and above the Dow Jones estimate of 773,000, the Labor Department reported Thursday.
Walmart shares dropped nearly 6% after its fourth-quarter earnings fell short of Wall Street estimates. The big box retailer also sees sales growth slowing this year as the pandemic momentum ebbs.
“This is not the direction that you want to see jobless claims go but keep in mind this could be a small bump in the road as the pace for vaccinations continues to accelerate and cases are down across the country,” said Mike Loewengart, chief investment officer at E-Trade Financial.
Shares of Apple fell another 2.4%. The tech giant are down 4.6% so far this week as investors take some profits in the Big Tech stocks that have led the market back to a record. Tesla dipped 2.5%, bringing week-to-date losses to 4.6%.
The move comes after a Wednesday session in which the broad market struggled to pick a clear direction. The Dow, buoyed by Chevron and Verizon, ticked slightly higher to set a new record, but the S&P 500 and Nasdaq Composite closed in negative territory.
Corporate America is wrapping up a strong earnings season and policymakers in Washington bargain on another round of stimulus. Cliff Hodge, the chief investment officer at Cornerstone Wealth, said that finalizing the stimulus deal could provide another move higher for the markets even if it is somewhat priced in already.
“When you think about how the additional stimulus can affect the average consumer, with the CARES Act 1.0 and the second round of checks really boosting savings, at this point we really feel strongly that additional stimulus will go directly into the economy,” Hodge said.
Investors are closely watching price movements outside of equities, where Treasury yields are trading near one-year highs and oil and gas prices have soared amid the cold snap in Texas.
The Congressional hearings on the GameStop saga are also set to begin on Thursday, with leaders of Melvin Capital and Robinhood joining Reddit trader Keith Gill at the U.S. House of Representatives’ Committee on Financial Services.
