Tuesday, September 29, 2020

Stocks halt four-day run as economic worry returns

Jul 24. 2020
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By Syndication Washington Post,  Bloomberg · Vildana Hajric, Claire Ballentine · BUSINESS, US-GLOBAL-MARKETS

U.S. stocks reached their lowest level in a week after an unexpected rise in jobless claims rekindled concern that the economic recovery has stalled. The dollar weakened, and Treasuries rose.

 The S&P 500 Index slipped from a four-month high, led by losses in technology firms and companies that make non-essential consumer goods. The Nasdaq 100 index dropped to a two-week low and turned lower for the week, erasing Monday's rally that was the biggest since April. Twitter jumped after daily-user growth surged, but Alphabet, Amazon and Apple each lost more than 3%. Microsoft slumped after cloud growth slowed. Tesla slid even after results beat estimates.

The first uptick in jobless claims since March comes as Congress negotiates a new relief package for millions of Americans who are set to lose enhanced benefits at the end of the month. Other worrying signs of economic slowing added to concern that the growth in some areas will stall.

"The recovery is in place, but the labor market is really, really fragile," said Gene Goldman, chief investment officer at Cetera Financial Group. "That's going to weight on the markets and it's going to weigh on consumers for a long time."

The 10-year Treasury yield fell to 0.58%, while Bloomberg's dollar index weakened for a fifth straight day. Crude slumped, while precious metals continued their torrid run of gains that have taken gold and silver prices to multiyear highs.

In Europe, the Stoxx 600 index increased on gains in carmakers and consumer products, led by Unilever's jump after sales fell less than expected. The yield on Italy's benchmark bonds fell below 1% for the first time since March amid euphoria over the Europe Union's pandemic recovery package.

Positive signals emerging from an earnings season that is expected to be historically weak had been driving investors into risk assets. An increase in U.S.-China tensions and a resurgence in the virus across large swaths of America deadened some of that optimism.

"Whenever the markets get to a point where there's something just around the corner that they're very focused on, that is when they sort of stop - whether they were trending higher or trending lower - they sort of start to trend sideways, but get choppy intra-day and start reacting more or less to headlines," said Shawn Cruz, senior manager of trader strategy at TD Ameritrade.

- - -

These are the main moves in markets:

Stocks

- The S&P 500 index fell 1.2%, to 3,235, as of 4 p.m. New York time, the first retreat of the week.

- The Dow Jones industrial average fell 1.3%.

- The Nasdaq Composite Index declined 2.3%.

- The Stoxx Europe 600 Index closed up 0.1%.

Currencies

- The Bloomberg Dollar Spot index lost 0.1%.

- The euro rose 0.2%, to $1.1593, reaching the strongest in more than 21 months on its fifth consecutive advance.

- The Japanese yen added 0.3% to 106.84 per dollar.

Bonds

- The yield on 10-year Treasuries fell one basis point, to 0.58%, the lowest in three months.

- Germany's 10-year yield increased two basis points, to -0.48%.

- Britain's 10-year yield was at 0.12%, the lowest on record.

Commodities

- West Texas Intermediate crude dipped 1.6%, to $41.24 a barrel.

- Gold futures strengthened 1%, to $1,882 an ounce, reaching the highest in about nine years on its fifth consecutive advance.

- Copper climbed 0.3%, to $2.94 a pound.

 

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