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Dow Off Lows as Tech Resistance Continues

Published 07/09/2020, 01:13 PM
Updated 07/09/2020, 02:56 PM
© Reuters.

© Reuters.

By Yasin Ebrahim

Investing.com – Wall Street moved pared some losses on Thursday, as tech rebounded from intraday lows though weakness in stocks tied to the progress of the economy kept the broader market in the red. 

The S&P 500 lost 0.54%, while the Nasdaq Composite rose 0.44% and the Dow Jones Industrial Average fell 1.27%.

The U.S. Department of Labor reported Thursday that initial jobless claims decreased by about 100,000 to 1.31 million in the week ended July 3, beating forecasts for a decline to 1.3 million.

Continuing claims fell 698,000 to 18.06 million, extending a trend of downside momentum that is "encouraging," Jefferies (NYSE:JEF) said. "Continuing claims are down 2.5 million over the past 4 weeks."

Despite the backdrop of resilience seen in the labor market, investors have cooled expectations for a V-shape economic recovery, as several states have paused, or rolled back reopening measures to contain a surge in cases in Covid-19 hotspots including Texas, California, and Florida.

Stocks tied to the progress of the reopening, and ultimately the economy, continue to come under pressure.  

Airlines and cruise stocks retreated, with American Airlines (NASDAQ:AAL) and Carnival (NYSE:CCL), both down more than 4%, among the notable decliners.

In tech, the so-called Fab 5, continued to hold onto slender gains. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN), all which collectively make up about 40% of the Nasdaq, traded above the flatline.

Energy led the selloff, paced by a decline oil prices as the pause of reopening measures in pockets of the U.S. offset signs of a recovery in gasoline demand seen a day earlier.

Financials were not far behind, falling 2% just days ahead of quarterly results from banks. The second-quarter earnings reports for a slew of Wall Street banks are likely to underscore a rough quarter amid rising loan loss provisions and weaker profit from lending activity weighed down by near-zero interest rates.

Elsewhere, AMC Networks (NASDAQ:AMCX) rallied as rumors swirled the company had hired Morgan Stanley (NYSE:MS) to explore a sale.

Latest comments

wallstret handing trump 2020 at this point
Everyday apple goes up by $10 adding tens of billions to the market cap. Where are these billions coming from?
taxpayers
im pro-trump., but when the nasdaq finally dumps things are going to get incredibly ugly. i think they are planning for one more bubble burst prior to november.
will be a prolonged recession if biden wins.
i dont think the indices track stocks anymore, but are 3x ETF for the number of COVID cases
Can't imagine what would happen when the Techies show some weakness ;-)
Keep the virus overplay alive to help the crazy hidin Biden!
What I perceive from the market is that investors with focus on long-term growth prospects an key into stocks of companies that are highly dependent with recoveries made in the real sector of the economy. However, if you are an investor with focus on short-term growth prospects, companies' stocks such as technology that are somewhat insulated from growth in the real economy would be deemed fit for you.
Sounds like your onto something. I’d add though that technology will outperform in the long term as well as the short term, and most like more so than old economy cyclical “value” names that we are constantly told will, one day, outperform.
Sounds like you’re onto something. I’d add though that technology will outperform in the long term as well as the short term, and most like more so than old economy cyclical “value” names that we are constantly told will, one day, outperform.
money printing will stable it for few weeks, after that we will see massive drop.
J money man Powell, knows no weakness
probably Q2 earning reports can shake those crazy gains
Amazing what happens when the federal reserve buys their debt.
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