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market-snapshot:-dow-looks-set-to-pull-back-thursday-as-it-closes-in-on-record-ahead-of-jobless-claims-report
market-snapshot:-dow-looks-set-to-pull-back-thursday-as-it-closes-in-on-record-ahead-of-jobless-claims-report

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Market Snapshot: Dow looks set to pull back Thursday as it closes in on record ahead of jobless claims report

Market Snapshot

Tech-related stocks may lead the way lower to start the session


JOHANNES EISELE/AFP via Getty Images

U.S. stock-index futures fell early Thursday, while investors sift through economic data including the weekly jobless benefit claims report, after the stock market posted one of its best daily gains in weeks on Wednesday.

How are equity indexes performing?

Futures for the Dow Jones Industrial Average
YM00,
-0.16%

YMU20,
-0.16%

were off 22 points, or 0.1%, at 29,069; those for the S&P 500 index
ES00,
-0.59%

ESU20,
-0.59%

were off 16.20 points at 3,563, a decline of 0.5%; Nasdaq-100 futures
NQ00,
-1.48%

NQU20,
-1.48%

were down 140.50 points, or 1.1%, at 12,271.

On Wednesday, Dow
DJIA,
+0.03%

surged 454.84 points, or 1.6%, ending at 29,100.50, or 1.5% away from its Feb. 12 closing high of 29,551.42. The S&P 500 index
SPX,
-0.59%

climbed 54.19 points, or 1.5%, to settle at a record 3,580.84, its 22nd record close this year. The Nasdaq Composite Index
COMP,
-1.66%

advanced 116.78 points to close at a record 12,056.44, a gain of 1%, and its 43rd record close of the year.

What’s driving the market?

After a day of records for the S&P 500 and the Nasdaq Composite and the rapid of approach of the Dow to its own record, investors watched U.S. weekly jobless benefits claims data on Thursday morning.

Total new applications for unemployment benefits in the latest weekly period ending in Aug. 30 fell 130,000 to a seasonally adjusted 881,000 or lower than the consensus estimate of 940,000. This comes after the Labor Department said it tweaked its seasonal adjustment method amid the COVID-19 pandemic.

In other data, a revised reading of U.S. second-quarter productivity rose 10.1%, while the trade deficit widened to $63.6 billion.

Read: ADP says private sector added a less-than-expected 428,000 new jobs in August

Investors will also be watching a reading on the purchasing managers index in services from IHS Markit at 9:45 a.m. ET, and a survey by the Institute of Supply Management on activity in the service sector at 10 a.m. ET.

Market participants have been contending with a nearly incessant climb higher, with the focus on remedies for COVID helping to partially buttress the recent run-up. That said, Wednesday’s climb for stocks came even as large-capitalization technology-related stocks staged a pullback that didn’t disrupt the upward momentum of the broader equity market. Tech-related names have led the rebound of the market from coronavirus-lows but some strategists spotted encouraging signs that other areas beyond tech-related names were starting to rise.

“The more broad based this becomes, the more it signals a turning of the tide as far as the economic outlook is concerned, at least among those on Wall Street,” wrote Craig Erlam, senior market analyst at Oanda, in a daily research note.

However, there are concerns that market has climbed too far and too fast and that optimism over a vaccine for coronavirus is misplaced. The Centers for Disease Control and Prevention urged states to speed up approval for vaccine distribution sites by Nov. 1, which is just days before the presidential election.

Meanwhile, doubts about traction for further fiscal stimulus from Washington lawmakers has continued to haunt investors. Investors have been betting on Republicans and Democrats striking a deal later this month to offer additional relief to American consumers and businesses, after talks stalled in August. On Tuesday, House Speaker Nancy Pelosi said Democrats and Republicans still have “serious differences,” following a brief phone call.

Separately, tensions flared up between Beijing and Washington as the Trump administration signaled plans to impose new restrictions on Chinese diplomats in the U.S., citing Beijing’s use of similar measures on American envoys. The Chinese embassy in Washington responded by accusing the U.S. of violating international conventions.

Which stocks are in focus?
  • Michaels Cos. Inc. shares
    MIK,
    -8.23%

    soared 6.7% in premarket trade, after the arts and crafts retailer blew past estimates for the second quarter as stores reopened after being closed during the pandemic.

  • Shares of Sanofi
    SNY,
    +0.45%

    gained 0.4% before the bell after the drugmaker and GlaxoSmithKline
    GSK,
    -0.10%

    said their COVID-19 vaccine candidate has entered a Phase 1/2 clinical trial.

  • Arconic Corp.
    ARNC,
    +0.08%

    said Thursday it restored the salaries and 401K match for all of its U.S. salaried employees, including executives on Sept. 1, after cutting them earlier this year to counter the impact of the coronavirus pandemic.

  • Shares of Designer Brands Inc.
    DBI,
    -22.45%

    plummeted 19% in premarket trading Thursday, after the parent of the DSW Designer Shoe Warehouse retail chain reported a wider-than-expected fiscal second quarter

  • Facebook
    FB,
    -2.40%

    slipped after announcing Thursday it will ban new political ads from running in the week before the Nov. 3 presidential election.

How are other markets trading?

The 10-year Treasury note yield
TMUBMUSD10Y,
0.638%

edged 0.3 basis point higher to 0.653%. Bond prices move inversely to yields.

The ICE U.S. dollar index
DXY,
-0.01%

, which tracks the performance of the greenback against its major rivals, was up 0.2%.

Gold futures
GCZ20,
+0.11%

were down 0.4% to trade at $1,936.80 an ounce, on the New York Mercantile Exchange. U.S. benchmark crude futures
CL.1,
-2.38%

fell 2.2% to a one-month low of $40.61 a barrel.

The Stoxx Europe 600 index
SXXP,
+0.49%

rose 0.4%, while the U.K.’s benchmark FTSE
UKX,
+1.11%

as up 0.5%. In Asia, Hong Kong’s Hang Seng index
HSI,
-0.44%

fell 0.5% and China’s CSI 300
000300,
-0.55%

closed 0.6% lower. The Nikkei
NIK,
+0.93%

rose 0.9%.

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