S&P 500’s four-day winning streak snaps

Wall Street paused on Thursday, and the S&P 500 fell for the first time in five days as stocks that had held steadiest through this year’s feverish swings gave back some of their gains.

The S&P 500 lost 10.52 points, or 0.3%, to 3,112.35 after being on track earlier in the day for its longest winning streak since December. The Dow Jones Industrial Average rose 11.93 points, or less than 0.1%, to 26,281.82, and the Nasdaq composite fell 67.10, or 0.7%, to 9,615.81.

A report showed that the number of U.S. workers filing for unemployment benefits eased for a ninth straight week, approximately in line with the market’s expectations. But economists saw pockets of disappointment after the total number of people getting benefits rose slightly. That number had dropped the prior week, which had raised hopes that some companies were rehiring workers.

Many professional investors have been arguing that the stock market’s rally, which had reached nearly 40% since late March, was overdone and that a pullback likely was coming. Stocks began surging after massive aid for the economy from Washington. More recently, they’ve climbed on optimism that the recession created by the reaction to the coronavirus outbreak could end relatively quickly as states and countries lift lockdown restrictions.

Critics point to how the gains for stocks seem to assume a quicker recovery for the economy than some economists expect, along with the risks of rising U.S.-China tensions and the possibility of second waves of coronavirus infections.

The next big piece of economic data to bolster or weaken the market’s optimism about the economy’s prospects lands early Friday, when the Labor Department releases its monthly jobs report for May. Economists expect it to show employers slashed 8.5 million jobs last month, down from 20.5 million in April, and that the unemployment rate jumped to 19.8% from 14.7%.

“The May unemployment rate will likely be the worst one, and it will get better from there,” said Randy Frederick, vice president of trading and derivatives at Schwab Center for Financial Research.

“The market should have it baked in for the most part.”

Continuing a recent trend, investors on Thursday were cycling out of stocks that had held up the best when the hunt was for companies that can win in a weak, stay-at-home economy.