The Dow Jones Industrial Average fell slightly on Thursday following the release of weaker-than-expected jobless statements details at a time when lawmakers find it difficult to thrust via new fiscal stimulus before year-end.
The Dow 30-stock Dow traded lower forty two points, or 0.1 %. The S&P 500, meanwhile, eked away a little gain, thus the Nasdaq Composite advanced 0.5 %. Verizon and American Express were the worst performing Dow stocks, falling much more than one % each.
First weekly jobless assertions jumped to 853,000 last week, topping a Dow Jones estimate of 730,000. That marks probably the highest number of initial statements being filed since September and the first time since October which they topped 800,000.
“Given the latest behavior of initial claims, we will probably see even more increases in continuing claims moving forward,” had written Thomas Simons, money market economist at Jefferies. “Evidence were building indicating that claims reach an inflection point in first November due to rising COVID case numbers and also forced the imposition of societal distancing policies that actually hurt the service segment of the economy.”
Chart showing preliminary jobless claims due to the week ending December 5, 2020.
Thursday’s report stoked fears regarding economic recovery moving ahead as Congress attempts to build a brand new stimulus package.
Senate Majority Leader Mitch McConnell claimed he wants Congress to pass a coronavirus relief costs with neither legal immunity for businesses or state and local government relief. Senate Minority Leader Chuck Schumer, D-N.Y., said McConnell’s proposal to move stimulus talks forward without state and local government aid is not in great faith.
The House of Representatives passed a federal government funding extension Wednesday that would maintain the federal government running by Dec. 18 & purchase time for more negotiations for a bigger relief bill.
Nonetheless, Commerce Street Capital CEO Dory Wiley believes caution is warranted for stock investors, noting that ninety % of stocks on the NYSE trading above the 200-day moving average of theirs as an indication that valuations might be stretched.
“Timing the industry isn’t always well advised and paring back can miss out on several gains the next 2 weeks, but after such great returns in clearly a terrible fundamentals year, I think taking some profits and moving to money, not bonds, tends to make some sense here,” Wiley said.