Wall Street falls short of record for S&P 500, again

Another afternoon fade for stocks left Wall Street just shy of a record on Thursday.

NEW YORK » Another afternoon fade for stocks left Wall Street just shy of a record on Thursday, after the S&P 500 briefly crossed above its all-time closing high for the second straight day.

The S&P 500 dipped 6.92 points, or 0.2%, to 3,373.43. At one point during the day, it climbed above 3,386.15. That’s the record closing level it set in February, before investors appreciated how much devastation the new coronavirus would cause for the global economy.

The Dow Jones Industrial Average dipped 80.12, or 0.3%, to 27,896.72. The Nasdaq composite climbed 30.27, or 0.3%, to 11,042.50.

It’s just the second loss for the S&P 500 in the last 10 days. The index began stumbling in the early afternoon, as Treasury yields were accelerating following an auction of 30-year bonds by the U.S. government. Higher yields mean prices for bonds were falling.

“We saw a sell-off in bonds, and that led to a little bit of weakness in stocks,” said JJ Kinahan, chief strategist at TD Ameritrade. “It’s not a terrible day by any stretch of the imagination, but it’s also a summer day,” which are traditionally slow for markets.

Yields had already perked up before the auction, following a report showing that 963,000 U.S. workers filed for unemployment benefits last week. It’s an incredibly high number of layoffs, but it’s also the first time the tally has dropped below 1 million since March, before widespread business lockdowns caused a tsunami of layoffs.

Economists said the drop in jobless claims, which was better than the market was expecting, is an encouraging step. But they also cautioned that it could be more of an outlier than a trend, and more data reports are needed to confirm it.

The yield on the 10year Treasury climbed to 0.71%. It was at 0.57% just on Monday.

Wall Street has erased almost all of the nearly 34% drop the S&P 500 suffered from late February into March, even though the economy is still hobbled despite some recent improvements.

Massive efforts to support the economy by the Federal Reserve and U.S. government helped trigger the rally, and investors are now waiting for Congress and the White House to deliver another round of aid after unemployment benefits and other measures in the last tranche expired.

Democrats and Republicans are still far apart, but hope remains on Wall Street that they’ll reach a deal on stimulus that investors say is crucially needed.

“The news out of D.C. has really been shrugged off by the market,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth

Management.

He said investors have also gained more confidence about a broader economic recovery as data reports continue to show steady improvements.

“There’s still a lot of weakness, but various parts of the data are showing improvement,” he said. “There’s a moderation, but not a reversal.”

Most stocks in the S&P 500 and across Wall Street were weaker on Thursday. Energy producers had some of the sharpest losses, but resilience for Apple and several other Big Tech stocks helped to keep the losses in check.

“The pause in stocks right now is more related to the fact that the S&P 500 is essentially battling with an all-time high right now,” said Randy Frederick,

vice president of trading & derivatives at Charles Schwab. “There’s a huge level of (technical) resistance.”

He said it’s similar to how the market scuffled for several weeks until late July, when it turned positive for 2020 again.

Cisco Systems slumped 11.2% for the biggest loss in the S&P 500, even though it reported better results for its latest quarter than Wall Street expected. It gave a forecast for the current quarter that fell short of analysts’ forecasts.

In Asian stock markets, Japan’s benchmark Nikkei 225 jumped 1.8%, South Korea’s Kospi gained 0.2% and Hong Kong’s Hang Seng slipped 0.1%. Stocks in Shanghai were virtually flat.