US stocks fell Thursday as investors were discouraged by unexpectedly poor unemployment and a grim outlook from Walmart.
The Dow Jones Industrial Average fell 210 points. The S&P 500 was down 0.8% while the Nasdaq Composite was down 1.3% as investors continued to turn away from high-flying technology.
Initial unemployment insurance claims were 861,000 last week, the highest in a month and above the Dow Jones estimate of 773,000, the Department of Labor reported Thursday.
Walmart stock fell nearly 6% after fourth-quarter earnings fell below Wall Street estimates. The big box retailer also sees a slowdown in sales growth this year as pandemic momentum subsides.
“This is not the direction unemployment claims should be headed, but keep in mind that this could be a minor nuisance as the pace for vaccination continues to accelerate and cases across the country are falling,” said Mike Loewengart, principal investment officer at E-Trade Financial.
Apple shares fell another 2.4%. The tech giant is down 4.6% this week as investors take some gains in big tech stocks that have brought the market back to record highs. Tesla fell 2.5%, bringing the week’s losses to 4.6%.
The move comes after a meeting on Wednesday when the broader market struggled to take a clear direction. The Dow, carried by Chevron and Verizon, rose slightly to set a new record, but the S&P 500 and Nasdaq Composite closed in negative territory.
Corporate America is ending a strong season of earnings and Washington policymakers are negotiating another round of incentives. Cliff Hodge, Cornerstone Wealth’s chief investment officer, said the conclusion of the economic agreement could mean another step for the markets, even if the price is already somewhat priced in.
“If you think about how the added incentive can affect the average consumer, since the CARES Act 1.0 and the Second Round of Reviews really add to the savings, at this point we firmly believe that additional incentives will pour straight into the economy” said Hodge.
Investors are closely monitoring price movements outside of stocks, where government bond yields are trading near the year-long high and oil and gas prices have risen in the face of the Texas cold snap.
The congressional hearings on the GameStop saga are also set to begin on Thursday. Melvin Capital and Robinhood executives will join Reddit retailer Keith Gill on the US House of Representatives Financial Services Committee.
