Jobs, virus numbers drag down Wall Street

But Nasdaq composite, an outlier, adds 0.5%, hits another record.

Most of Wall Street wilted Thursday on fears the economy’s recent improvements may be set to fade as coronavirus cases keep climbing.

The S&P 500 lost 0.6%, with three in four stocks within the index falling. The sharpest drops hit oil companies, airlines and other stocks whose fortunes are most closely tied to a reopening and strengthening economy. The Dow Jones Industrial Average dropped 1.4%, and the Russell 2000 index of smallcap stocks lost 2%.

The Nasdaq composite was an outlier, as investors continue to bet big tech-oriented stocks can keep growing almost regardless of the economy’s strength. It added 0.5% and hit another record.

Energy stocks dropped 4.9% for the biggest loss among the 11 sectors that make up the index. Benchmark U.S. crude dropped $1.28 to settle at $39.62 per barrel.

Thursday’s headline economic report showed that a little more than 1.3 million workers filed for unemployment claims last week. It’s an astoundingly high number, but it’s also down from 1.4 million the prior week and from a peak of nearly 6.9 million in late March.

Economists point to a troubling slowdown in the pace of improvements, including moderating declines in the four-week average of jobless claims. The U.S. unemployment rate is currently 11.1%.

“The initial jump was the easy part,” said Patrick Schaffer, global investment specialist at J.P. Morgan Private Bank. “The reality is the labor market continues to face enormous headwinds.”

The yield on the 10-year Treasury note sank to 0.60% from 0.65% late Wednesday, and gold held above $1,800 per ounce.