Tech giants lead drop in U.S. stocks as global rally fades

Decline follows report that layoffs across the nation remain high.

Wall Street stumbled Thursday after a report showed layoffs continue to sweep the country at a stubbornly steady pace, one of several mixed reports to highlight the uncertain path ahead for the economy.

The Standard & Poor’s 500 index slipped 0.3%, following up on declines across Europe and Asia, as a worldwide rally faded. Stocks in China fell particularly sharply after a report showed shoppers there are slow to spend even though its economy has returned to growth. Treasury yields also lost ground in a sign of increased caution.

Heavy losses for travelrelated stocks helped pull the S&P 500 to its first loss in three days, down 10.99 points to 3,215.57. Cruise ship operators, airlines and hotels gave up chunks of their big gains from a day earlier.

Drops for Microsoft and other tech titans also weighed heavily because they’re the largest stocks in the index. They also sent the Nasdaq composite, which set a record last week, to a larger loss than other indexes. It fell 76.66 points, or 0.7%, to 10,473.83. The Dow Jones industrial average lost 135.39 points, or 0.5%, to 26,734.71.

It marks the latest ebb for markets, which have mostly been churning up and down for a little more than a month. Stocks have been pushed higher by signs of strengthening in the economy as lockdowns have eased, along with massive aid from the Federal Reserve and Congress. Hopes for a potential COVID-19 vaccine also helped the S&P 500 erase most of an earlier 34% drop from its record. It’s now 5% below its peak.

Reports on Thursday showed that layoffs across the country remain stubbornly high, with 1.3 million workers filing for unemployment benefits last week. That’s down slightly from the prior week, but only by 10,000. The improvement was weaker than economists expected.

The yield on the 10-year Treasury fell to 0.61% from 0.63% late Wednesday. It tends to move with investors’ expectations for the economy and inflation.

Tech stocks were among the market’s hardest hit. Microsoft fell 2% and Apple lost 1.2%. It’s a rare step back for the giants, which are both still up roughly 30% for 2020 on expectations that they can keep growing almost regardless of the pandemic.

On the winning side were several financial stocks, whose profit reports this week helped kick off earnings season for the market.

Morgan Stanley rose 2.5% after it reported stronger profit than expected.

Bank of America also turned in a better profit report than expected, but it fell 2.7% after it set aside $4 billion to cover loans potentially going bad amid the recession.

Benchmark U.S. crude oil lost 45 cents to $40.75 a barrel. Brent crude, the international standard, fell 42 cents to $43.37 a barrel.