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Wall Street Opens Lower, Consolidating After Weak Jobless Data; Dow Down 110 Pts

Stock Markets Nov 25, 2020 09:39AM ET
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By Geoffrey Smith 

Investing.com -- U.S. stock markets opened lower on Wednesday, consolidating after a wild rally on Tuesday in volumes that were extraordinarily high for a holiday week. 

A market that's in a hurry to have the 2021 recovery begin earlier received a reality check that 2020 still has a ways to run, as initial jobless claims rose for a second straight week to 778,000. Analysts had expected a decline to 730,000.

By 9:35 AM ET (1435 GMT), the Dow Jones Industrial Average was down 109 points, or 0.4% at 29,937 points. The S&P 500, which like the Dow had closed at a record high on Tuesday, was down 0.2%, while the Nasdaq Composite was up 0.3%.

The Commerce Department, meanwhile, left its estimate for third-quarter GDP growth unchanged at an annualized 33.1%. That vigorous summer rebound now seems some time ago, with states and municipalities again slapping restrictions on social and business life to stop the Covid-19 virus from overwhelming their healthcare systems. The U.S. set a new record of 86,000 hospitalized on Monday, while an average 1,500 Americans died of the disease every day for the last week. 

Layoffs are likelier now to feed through faster into high-frequency data, given that Congress has allowed the pandemic-related enhancement of unemployment benefits to expire. That was evident in a 0.7% decline in personal income in October, considerably worse than the 0.1% rise expected.

Among early movers, Tesla (NASDAQ:TSLA) stock gave back a small fraction of its recent gains on the back of reports saying that it had issued a recall for over 9,000 vehicles in the U.S. Other electric vehicle stocks were down by much more in response to reports that Chinese authorities are investigating the sector, amid rumored suspicions that government subsidies may have been abused. Tesla has soared this week in anticipation of its inclusion in the S&P 500 which, along with the prospects of an EV-friendly administration, has prompted a suite of bullish brokerage reports.

Elsewhere, Gap (NYSE:GPS) stock underperformed after the company reported disappointing figures for the third quarter: As with many old-economy stocks that have had to scale up their online presence in a hurry because of the pandemic, the company's operating costs - notably shipping costs - rose sharply. Gap was down 18.2% in early trading, losing all its gains of the last two weeks. It has quadrupled from the low it hit during the March panic, but is still below its pre-pandemic level.

Electric truckmaker Nikola (NASDAQ:NKLA) also stumbled, losing 17.5% after the company's CEO apparently failed to convince investors that General Motors (NYSE:GM) won't pull out of its deal to buy a stake in it for $2 billion. GM stock, which has been supported in recent weeks by the prospect of gaining exposure to what's likely to be a high-growth sector in futures, fell 3.9%. 

Wall Street Opens Lower, Consolidating After Weak Jobless Data; Dow Down 110 Pts
 

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Comments (2)
Kasey Goad
Kasey Goad Nov 25, 2020 10:33AM ET
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Telsa all the way. I bought in st $395. Im not going anywhere. Every week i buy 1 more stock. But most of my stocks are st $395. And i just turned 30 and turned about all of this on my own. And i think since the new president elect wants eco friendly telsa will continue to soar.
Zack Harding
Zack Harding Nov 25, 2020 10:33AM ET
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Get out while you can...join SIRC.
Kaveh Sun
Kaveh Sun Nov 25, 2020 10:33AM ET
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U may b right. I missed tsla at 28 before it went on exponential run for the last 2 years. If i miss a stock, i wont touch that sector. If i do, it is greed/chasing for me. When traders r greedy or chasing, they loose.
greg mason
greg mason Nov 25, 2020 10:33AM ET
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Kaveh Sun  Tesla made new  52 wk high @ 563.05 that's more then Great , looks like will set some higher lows, JPM worked well with Yellen during Financial crisis , here is and  recent update/Yellen may restore Treasury-Fed cooperation, with eye on GOP Saleha Mohsin and Craig Torres, Bloomberg News
greg mason
greg mason Nov 25, 2020 10:19AM ET
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read JPM Report they Nailed it
 
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