Dow Off Lows but Under Pressure as Tech Bloodbath Continues
The Dow moved off lows on Thursday, as big tech cut some of its losses but still remained deep in the red as investors digested economic data pointing to signs of a slowdown in the recovery at a time when hopes fade for further government stimulus.
The Dow Jones Industrial Average fell 0.63%, or 177 points. The S&P 500 was down 0.63% while the Nasdaq Composite slipped 1.56%.
Weaker-than-expected labor and housing market raised concerns that the pace of the recovery could be on the wane, prompting investors to rein in their bullish bets on stocks.
Initial jobless claims came in at 860,000 on a seasonally adjusted basis in the week ended Sept. 12, the Department of Labor said Thursday. That was below the 893,000 reading from the prior week, but missing economists' forecast for a reading of 850,000.
"The downward trend in regular state initial jobless claims - that is, the headline number - has slowed to a crawl in the past couple of weeks," Pantheon Macroeconomics said in a note.
The Commerce Department, meanwhile, reported an unexpected 76,000 decline in housing starts as activity was hurt by Hurricane Laura and Tropical Storm Marco. While the Philly Fed headline sentiment index, a key gauge of manufacturing activity, fell to a reading of 15, in-line with estimates.
Against the backdrop of a slowing economy, big tech continued its selloff, with Facebook (NASDAQ:FB) leading the decline, falling more than 3%. Apple (NASDAQ:AAPL) Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) also fell.
Cloud company Snowflake (NYSE:SNOW), which more the doubled on its public market debut a day earlier fell 10%.
Financials continued to struggle, with Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and JPMorgan Chase & Co (NYSE:JPM) down more than 1% amid worries that the Fed's pledge to keep rates at near-zero until 2023 will continue to hamper net interest margin.
Materials sidestepped the broader market weakness as Mosaic (NYSE:MOS) surged more than 6% rebounding from weakness over the last few days after the company reported weaker revenue in August.
In other news, Dave & Buster’s Entertainment (NASDAQ:PLAY) slumped 27% after the company warned it could be forced into bankruptcy if an agreement can’t be reached with its creditors, The Wall Street Journal reported.