S&P 500 set to snap winning streak as labor market rebound slows
Reuters
Published Jul 23, 2020 06:54AM ET
Updated Jul 23, 2020 10:45AM ET
By Medha Singh and Devik Jain
(Reuters) - The S&P 500 struggled for direction on Thursday, following four straight days of gains as investors held out for a new coronavirus relief package, with latest data showing signs that a recovery in the labor market was stalling.
The number of Americans filing for unemployment benefits rose last week for the first time in nearly four months against the backdrop of a resurgence in coronavirus cases, the Labor Department's data showed.
"The monetary taps are on and are likely to remain so while unemployment is so high, and this should continue to support markets," said Geir Lode, head of global equities, International at Federated Hermes (NYSE:FHI) in London.
U.S. Treasury Secretary Steve Mnuchin said the White House was interested in getting a trillion-dollar coronavirus relief bill out quickly and was working with Senate Republicans to hammer out language on extending enhanced unemployment benefits.
Optimism about a potential vaccine, fiscal stimulus and improving economic data has helped the benchmark S&P 500 recoup most of its virus-induced losses and rise 1.4% this year. The blue-chip Dow is still down about 5% year-to-date, while the tech-heavy Nasdaq (IXIC) has climbed about 19%.
Of the 75 S&P 500 companies that have reported quarterly results, 77.3% of them have beaten dramatically lowered profit estimates, according to IBES Refinitiv data.
Microsoft Corp (O:MSFT) fell 1.2%, weighing the most on the S&P 500 and Nasdaq, as its flagship cloud computing business Azure reported quarterly sales growth of under 50% for the first time ever.
Tesla Inc (O:TSLA) rose 1.5% after posting a fourth consecutive quarterly profit, clearing a hurdle that could lead to the electric carmaker's inclusion in the S&P 500 index (SPX).
Twitter Inc (N:TWTR) jumped 5.7% as it reported a record yearly growth in daily users even as its ad sales sank.
"Many continue to believe there will be a V-shaped recovery, although it remains too early to say whether the earnings season will add weight to that view or not," Lode added.
At 10:03 a.m. ET, the Dow Jones Industrial Average (DJI) was down 51.44 points, or 0.19%, at 26,954.40, the S&P 500 (SPX) was up 1.32 points, or 0.04%, at 3,277.34. The Nasdaq Composite (IXIC) was up 6.20 points, or 0.06%, at 10,712.33.
Travelers Cos Inc's (N:TRV) 2.9% decline weighed the most on the Dow after the property and casualty insurer reported a second-quarter loss.
Home builder PulteGroup Inc (N:PHM) jumped 11.5% after posting a higher quarterly profit.
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Shares of American Airlines (O:AAL) and Southwest Airlines (N:LUV) slipped after the carriers said they were rethinking the number of flights they had planned to add to their schedules for August and September, as COVID-19 cases spike in some parts of the United States.
The broader S&P 1500 airlines index <.SPCOMAIR> fell 1.3%.
Advancing issues outnumbered decliners for a 1.22-to-1 ratio on the NYSE and a 1.54-to-1 ratio on the Nasdaq.
The S&P index recorded 41 new 52-week highs and no new low, while the Nasdaq recorded 57 new highs and four new lows.
Written By: Reuters
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