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Stocks Fall After Larger-Than-Expected Job Losses

TOPLINE

Stocks took a hit from disappointing jobless claims data this morning as investors continued to assess the prospects for an economic recovery from the coronavirus pandemic.

KEY FACTS

The Dow Jones Industrial Average was flat on Thursday, while the S&P 500 fell 0.3% and the tech-heavy Nasdaq lost 0.7%.

The Nasdaq-100 index briefly jumped to a new record high, becoming the first major index to fully erase its losses from the coronavirus downturn, before paring back gains.

Stocks opened lower on the back of disappointing U.S. jobless claims data: Another 1.9 million Americans filed for unemployment in the week ending May 30, 2020, higher than the 1.8 million expected. 

While jobless claims have been slowing steadily, continuing claims were higher than expected and increased from last week. The damage caused by the coronavirus evidently continues to take a major toll on the economy. 

The market’s losses were kept in check, however, after the European Central Bank said it would buy an additional 600 billion euros’ worth of government bonds, bringing the total for its Pandemic Emergency Purchase Program to more than 1.35 trillion euros.

With Las Vegas reopening on Thursday, casino stocks rallied: MGM Resorts rose more than 6%, while Wynn Resorts was up over 1%. 

Other stocks that would directly benefit from a reopening also continued to move higher on Thursday, including airlines and some retailers.

Big number: More than 42 million

That’s how many Americans have filed for unemployment since the coronavirus crisis began.

What to watch for

Stocks rallied for three straight days earlier this week, moving higher despite widespread civil unrest across the country stemming from the death of George Floyd. Wall Street doesn’t see the mass protests as a threat to either corporate earnings or an economic recovery, at least not yet: The S&P 500 is up over 4% since the unrest began on May 26. 

Key background

The market has moved steadily higher so far in June, building on back-to-back monthly gains, thanks to optimism about reopening the economy. Both the Dow and S&P rose more than 4% in May, after rallying more than 11% in April. The S&P is now up over 40% from its coronavirus crisis-level low on March 23, 2020.

Further reading

Dow Jumps 500 Points As Investors Focus On Reopening The Economy (Forbes)

Jobless Claims Slowed To 1.9 Million Last Week, But The Labor Market Crisis Isn’t Over Yet (Forbes)

As Las Vegas Reopens, Should Investors Bet On Casino Stocks Rebounding? (Forbes)

Mass Protests Across The U.S. Have No Impact On Stocks, What Gives? (Forbes)

Full coverage and live updates on the Coronavirus

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