Rising jobless claims and plunging GDP weighed on U.S. stocks Thursday.
The Dow and broader U.S. stock market tumbled on Thursday, as mixed earnings and dismal economic numbers weighed on investors’ sentiment.
Two of three Wall Street indices reported losses, with the Dow Jones Industrial Average (DIA) falling 225.31 points, or 0.9%, to 26,314.26. The blue-chip index was down 500 points earlier in the day.
The broader S&P 500 Index (SPY) of large-cap stocks declined 0.4% to close at 3,246.24. Losses were concentrated in six of 11 primary sectors, with energy leading the declines. Materials and financials also underperformed the broader market.
Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) reversed losses to close up 0.4% at 10,587.91.
The CBOE Volatility Index (VXX), commonly known as the VIX, edged higher on Thursday. The so-called “investor fear index” peaked at 28.29 on a scale of 1-100 where 20 represents the historic average. It would eventually settle up 5.6% at 25.44.
In economic data, U.S. jobless claims rose for a second consecutive week, underscoring a fragile recovery amid the pandemic. The number of Americans filing for first-time unemployment benefits rose by 12,000 to 1.434 million in the week ended July 25, the Labor Department reported Thursday.
Separately, the Commerce Department said second-quarter GDP slumped by a historic 32.9%, the worst on record. Personal consumption subtracted 25% from the Q2 number, government data showed.
The Final Word: The United States’ economy is still being ravaged by Covid-19. Several states have halted or reversed their reopening plans as the total number of cases approaches 4.5 million.