Stocks struggled for direction on Thursday investors weighed the rising number of coronavirus cases in the U.S. and around the world along with disappointing unemployment data.
The Dow Jones Industrial Average was down 82 points, or 0.3%. Earlier in the session, the Dow was down 271 points. It briefly recovered to trade positive before coming off those levels. The S&P 500 traded just 0.1% lower.
The Nasdaq Composite outperformed, rising 0.2%. That gain put the average on pace for its fifth straight gain.
Initial U.S. weekly jobless claims rose more than expected last week, coming in at 1.508 million. Economists polled by Dow Jones expected a print of 1.3 million.
“While initial claims have now fallen for the 11th straight week after the late March spike, this past week saw the slowest pace of decline on a percentage basis since early April so we’ll see if this is where it settles out for now,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in a note.
Several states in the U.S. are experiencing a resurgence of infections. Arizona reported a record-high number of new confirmed cases, while Texas saw an 11% daily spike in hospitalizations for patients with Covid-19 on Wednesday.
In China, the country’s capital city has reportedly closed schools and canceled flights to contain the latest wave of coronavirus cases. However, a disease expert in China announced the latest outbreak of coronavirus cases in Beijing had been brought under control.
“We believe the market is pricing in quite a bit of good news and the rally is likely to take a breather in coming months as the recovery evolves,” Scott Wren, Wells Fargo’s senior global market strategist, said in a note. “We expect volatility in the coming months as we gauge how the reopenings are going and how consumer spending is progressing.”
The Dow and the S&P 500 snapped their three-day winning streak on Wednesday. The tech-heavy Nasdaq Composite eked out a small gain.
While the market remained choppy, major stock averages are set to post solid gains this week after a sharp pullback in the week prior. The 30-stock Dow and the S&P 500 have gained more than 2% each this week so far, while the Nasdaq has risen about 3.3%.
“The fears regarding infection rates following the reopening of various States within the US and in other countries are understandable,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note. “We do not doubt that progress will have a staccato feel to it in many localities, but we would be very surprised if another outbreak took hold that came anywhere close to what we saw take place at the start of 2020.”
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