U.S. markets and stock exchange traded funds gave up their early morning gains and proceeded to fall lower toward the end of Thursday’s session as an elevated jobless claims rate clouded the economic recovery ahead.
On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) declined 1.7%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) decreased 1.1% and iShares Core S&P 500 ETF (NYSEArca: IVV) fell 1.4%.
“It’s going to be a battle for the next couple of days from investors who are trying to pick spots to get back into technology and traders who are using some of these sharp rallies to take profit,” Rick Meckler, partner at Cherry Lane Investments, told Reuters.
Technology stocks continued to take the lead in both Wednesday’s rebound and Thursday’s sell-off. Many observers, though, believe this may be just a temporary correction instead of the start of a deeper decline.
“If (the stock market) today closes up, even if they’re small gains, that’s going to give more confidence back to Wall Street participants to feel more comfortable to get back in,” Robert Pavlik, chief investment strategist at SlateStone Wealth LLC, told Reuters.
Weighing on market sentiment, the number of Americans filing new claims for unemployment benefits remained elevated last week, according to Labor Department data. Many warn that the persistent layoffs and furloughs across industries may be more permanent after the rebound from the reopening of the economy.
Additionally, the markets were disappointed with Capitol Hill after the U.S. Senate axed a Republican Bill that would have provided around $300 billion in new coronavirus aid while Democrats sought more funding. The bill has been trimmed from its previous $1 trillion price tag, which included jobless aid, liability protections for businesses, school funding, and another round of stimulus checks.
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