US Stocks Close Mixed Thursday 06/04 15:36
Wall Street paused on Thursday, and the S&P 500 fell for the first time in
five days as stocks that had held steadiest through this year's feverish swings
gave back some of their gains.
(AP) -- Wall Street paused on Thursday, and the S&P 500 fell for the first
time in five days as stocks that had held steadiest through this year's
feverish swings gave back some of their gains.
The S&P 500 lost 10.52 points, or 0.3%, to 3,112.35 after being on track
earlier in the day for its longest winning streak since December. The Dow Jones
Industrial Average rose 11.93 points, or less than 0.1%, to 26,281.82, and the
Nasdaq composite fell 67.10, or 0.7%, to 9,615.81.
A report showed that the number of U.S. workers filing for unemployment
benefits eased for a ninth straight week, roughly in line with the market's
expectations. But economists saw pockets of disappointment after the total
number of people getting benefits rose slightly. That number had dropped the
prior week, which had raised hopes that some companies were rehiring workers.
Many professional investors have been arguing that the stock market's rally,
which had reached nearly 40% since late March, was overdone and that a pullback
was likely coming. Stocks began surging following massive aid for the economy
from Washington. More recently, they've climbed on optimism that the recession
created by the reaction to the coronavirus outbreak could end relatively
quickly as states and countries lift lockdown restrictions.
Besides gains for stocks that seem to be assuming a quicker recovery for the
economy than they're expecting, critics also pointed to risks in rising
U.S.-China tensions and the possibility of second waves of coronavirus
The next big piece of economic data to bolster or weaken the market's
optimism about the economy's prospects lands early Friday, when the Labor
Department releases its monthly jobs report for May. Economists expect it to
show employers slashed 8.5 million jobs last month, down from 20.5 million in
April, and that the unemployment rate jumped to 19.8% from 14.7%.
"The May unemployment rate will likely be the worst one, and it will get
better from there," said Randy Frederick, vice president of trading and
derivatives at Schwab Center for Financial Research. "The market should have it
baked in for the most part."
Continuing a recent trend, investors on Thursday were cycling out of stocks
that had held up the best when the hunt was for companies that can win in a
weak, stay-at-home economy. Instead, investors moved into some areas of the
market whose fortunes would benefit most from a healthier economy.
Losses for technology stocks and health care companies were some of the
heaviest weights on the market. Microsoft slipped 1.3%, Johnson & Johnson fell
1.3% and UnitedHealth Group lost 2.4%.
Other falling stay-at-home winners included Netflix, down 1.8%, and Clorox,
On the winning end were airlines. American Airlines surged 41.1% for the
biggest gain in the S&P 500 after it said it plans to fly 55% of its normal
U.S. schedule next month. That's up from only 20% in April, as demand for
travel inches back toward normal following the pandemic.
Banks and industrial stocks were also strong amid hopes that a resumption in
growth for the economy will limit loan losses and allow for better sales orders.
Charles Schwab rose 5.5% after it said antitrust regulators won't block its
acquisition of TD Ameritrade. The companies expect the deal to close in the
second half of this year.
The S&P 500 is now within 8.1% of its record set in February after earlier
being down nearly 34%.
Longer-term Treasury yields rose decisively. That area of the market had
been one of the first to warn of the coming economic devastation from the
coronavirus outbreak, and it's been much more circumspect in recent weeks than
the U.S. stock market.
The yield on the 10-year Treasury rose to 0.81% from 0.76% late Wednesday.
It tends to move with investors' expectations for inflation and the economy's
European stocks were weaker after the European Central Bank said it expects
the region's economy to shrink 8.7% this year due to the pandemic. It also
announced it was nearly doubling its rescue program to help the economy.
The French CAC 40 was down 0.2%, Germany's DAX lost 0.5% and the FTSE 100 in
London dropped 0.6%.
Asian stocks were stronger. Japan's Nikkei 225 rose 0.4%, South Korea's
Kospi added 0.2% and the Hang Seng in Hong Kong picked up 0.2%.
A barrel of U.S. crude oil for delivery in July rose 12 cents to settle at
$37.41. Brent crude, the international standard, rose 20 cents to settle at
$39.99 per barrel.