S&P 500 has biggest loss in weeks as tech fades

NEW YORK — Slumping stocks across most of Wall Street sent the S&P 500 to its worst loss in nearly four weeks on Thursday, undercut by a report showing layoffs are picking up across the country with coronavirus counts.

Technology stocks had the sharpest drops after a betterthanexpected profit report from Microsoft failed to satisfy investors expecting even more from the company, whose stock has largely defied gravity and the pandemic this year. The sector helped drag the S&P 500 down 40.36 points, or 1.2%, to 3,235.66 for its first loss in five days.

The Dow Jones Industrial Average lost 353.51 points, or 1.3%, to 26,652.33. The Nasdaq composite fell 244.71, or 2.3%, to 10,461.

Other stock indexes around the world were mixed, while uncertainty across markets helped gold touch its highest price in nearly nine years.

The setback wiped out threequarters of the S&P 500’s gains from earlier in the week. Overall, the market is in a holding pattern and likely will remain there as investors gauge the path of the pandemic, business reopenings and the government’s reaction to them, said Jason Pride, chief investment officer of private wealth at Glenmede.

“We’re going to be dealing with that until we get a vaccine or cure, whether we like it or not,” he said.

“I don’t envy the people who have to make decisions regarding risk of this spreading versus the risk to people’s livelihoods. It’s a hard choice.”

Thursday’s headline economic report was one that has taken on much more importance for markets through the pandemic: the weekly tally of workers applying for unemployment benefits. Last week, the count rose by 109,000 to a little more than 1.4 million.

It breaks a stretch of 15 straight weeks of improvements, a streak that had raised investor optimism that the recession could prove to be shorter than expected. It comes as coronavirus counts continue to rise across much of the Sun Belt, leading to more business closures.

Among the market’s heaviest weights was Microsoft, which fell 4.3% despite reporting a bigger quarterly profit for the spring than Wall Street expected. It’s a relatively rare stumble for the giant, which has cruised to records recently on expectations that it can continue to grow whether the economy is locked down or not.

But with the rise come greater expectations, and analysts pointed to a 47% growth rate reported for Microsoft’s Azure cloud business during the quarter. That fell short of analysts’ forecast.

Because Microsoft is one of the largest U.S. stocks by market value, its movements have an outsized effect on indexes like the S&P 500.

Apple, the other titan that trades off with Microsoft for the title of most valuable U.S. stock, was also down 4.6%. Amazon also dropped 3.7%. Those three stocks alone accounted for more than half of the S&P 500’s loss.

Smaller stocks held up better, and the Russell 2000 index of smallcap stocks was virtually unchanged. It added 0.06 points to 1,490.20.