Stocks slip on China tension, jobless claims
Stocks closed broadly lower on Wall Street Thursday as investors weighed more data showing the economic damage being caused by the coronavirus pandemic and another flareup in tensions between the U.S. and China.
The S&P 500 fell 0.8%, shedding some of the gains it made in a solid rally a day earlier, though it remains on track to end the week sharply higher. Bond yields were mixed. Oil prices closed higher, extending a string of gains.
Technology and health care stocks took some of the heaviest losses. Only industrial sector stocks eked out a gain. Home builders, meanwhile, moved broadly higher.
“It really looks like a little bit of weakness ahead of the long holiday weekend,” said Ryan Detrick, senior market strategist for LPL Financial. U.S. markets will be closed Monday for Memorial Day.
The S&P 500 slid 23.10 points to 2,948.51. The Dow Jones industrial average fell 101.78 points, or 0.4%, to 24,474.12. The Nasdaq composite lost 90.90 points, or 1%, to 9,284.88. Smallcompany stocks have notched the biggest gains this week. The Russell 2000 inched up 0.63 points, less than 0.1%, to 1,347.56.
The selling was tentative at first, but gained momentum as the day progressed. Initially, traders reacted to news that the White House had issued a report attacking China’s economic and military policies, and its human rights violations. The report expands on President Trump’s gettough rhetoric that he hopes will resonate with voters angry about China’s handling of the disease outbreak.
The State Department announced that it had approved the sale of advanced torpedoes to the Taiwanese military, a move sure to draw a rebuke from Beijing, which regards the island as a renegade province.
The government’s latest report of applications for unemployment aid didn’t help. The Labor Department said more than 2.4 million people applied for unemployment benefits last week. All told, the running total of Americans who have lost their jobs in the two months since the coronavirus led to a near shutdown of the economy has climbed to 38.6 million.
Despite a week of uneven finishes, Wall Street is on track to recoup its losses from last week amid fresh hopes for an economic recovery in the second half of the year and optimism about a potential vaccine for COVID19. A strong rally on Monday reversed all of the market’s losses for the month. The index is still down about 13% from its high in February.
The National Association of Realtors said sales of previously occupied homes plunged 17.8% in April as the housing market remained hobbled by the coronavirus shutdowns. The downbeat report didn’t hurt home builder stocks, which climbed broadly. The pullback in sales came as the inventory of properties on the market fell to a record low last month. Freddie Mac said mortgage rates eased this week, another favorable trend for builders.
Oil prices closed higher for the sixth day day in a row. Benchmark U.S. crude oil for July delivery rose 43 cents, or 1.3%, to $33.92 per barrel. July Brent crude oil, the international standard, gained 31 cents, or 0.9%, to close at $36.06 a barrel.
The yield on the 10year Treasury note, a benchmark for interest rates on many consumer loans, fell to 0.66% from 0.68% late Wednesday.