Midday Market Update: Stocks Remain Under Pressure

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Stocks remained mostly down by midday Thursday, as economic headwinds are emerging.

The S&P 500 fell 0.8%, brought down by large cap tech stocks, as the NYSE FANG Index fell 1.8%. The 10-Year Treasury yield slipped to 0.72%. Yields fall when prices rise. The price of crude oil fell 1.9% to just above $40 a barrel.

Although the heavy market cap large cap tech group was pulling indices down, cyclical stocks were mostly down as well. Some, like consumer discretionary, were between flat and down slightly,, while others like manufacturing were down closer to 1%. Some banks rose a few tenths of a percentage point after being dealt harsh blows earlier in the week.

Jobless claims for the past week came in at 898,000, a far higher number than last week’s 845,000 and higher than economists estimates of roughly 830,000. Recently, the number of weekly jobless claims has been declining at a slowing pace week-over-week, causing investors concern over the pace of the economic recovery, a concern often thwarted by better-than-expected net jobs added.

But the data out Thursday, which featured a considerable increase in claims, is worrisome, especially as coronavirus vaccines are delayed, as is fiscal stimulus. Treasury Secretary Steve Mnuchin said fiscal stimulus isn’t likely until after the election. It is possible Thursday’s claims reflect an already ailing economic recovery resulting from the lack of stimulus.

Losses did moderate from the morning, as investors are confident the economic recovery can pick up speed once again within the next few months, as strong economic demand in September was a theme and did not have the benefit of fiscal stimulus.

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