Dow Slips on Weak Jobs Data; Slack Jumps on Reports of Takeover Talks

By Yasin Ebrahim

Investing.com - The Dow slipped Wednesday, a day after hitting an unprecedented high, as data pointing to trouble in the jobs market renewed focus on the impact of the pandemic.

The Dow Jones Industrial Average fell  0.64%, or 191 points, after rising above the 30,000 level on Tuesday. The S&P 500 was down 0.21%, while the Nasdaq Composite added 0.48%.

The U.S Labor Department reported that 778,00 people filed for unemployment insurance, up 30,000 from the prior week's 748,000, and well above expectations for 730,000 claims.

That was the second-consecutive week of rising claims for the first time since July 25, suggesting the impact of new restrictions in the parts of the U.S. and a lack of stimulus are taking a toll on the labor market.

"Stay-at-home measures, school closures, and limitations for businesses to operate are going to lead to more layoffs over the winter. It is going to get worse before it gets better," Jefferies (NYSE:JEF) said in a note.

The weaker jobs data arrived on the heels of data showing personal spending and durable goods orders increased more than expected, but some warn the impact of rising infections will likely keep a lid on the pace of the recovery.

"Cooler temperatures, which shuttered outdoor venues, a drop in unemployment benefits and a jump in COVID cases put a damper on spending and confidence," said. Diane Swonk, Senior Economist at Grant Thornton. 

The slew of data prompted investors to hit pause on value stocks, which tend to move in tandem with the pace of the economy.

Industrials, financials and energy traded in the red, though losses in the latter were kept in check by a climb in oil prices.

Oil price rose more than 1% on data showing an unexpected draw in U.S. weekly inventories.

Tech, however, remained above the flatline, with Apple (NASDAQ:AAPL), 1% on expectations for strong demand for its products ahead of the Holiday season.

"With more order activity kicking in over the last few weeks for iPhone 12 our initial reads are very bullish and give us incremental confidence in our supercycle thesis on iPhone 12," Wedbush analyst Daniel Ives said in a note.

In other news, Slack Technologies Inc (NYSE:WORK) jumped 30% on reports it had talks with Salesforce (NYSE:CRM) over a possible sale.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App