Dow drops 130 points as stocks slide for the third straight day amid uncertainty over COVID stimulus deal
Stocks fell on Wall Street in morning trading Thursday, extending the market's pullback this week in the third straight day of losses.
It came as optimism waned that Congress will deliver another round of stimulus for the economy and new data showed another weekly surge in the number of Americans seeking unemployment aid.
At 11.40am, the Dow Jones Industrial Average was down 135 points, or 0.48 percent, to 28,378.31. The S&P 500 was down 0.73 percent, and the tech-heavy Nasdaq was down 1 percent.
The selling was widespread, with technology, health care and companies that rely on consumer spending driving the decline.
Pedestrians pass the New York Stock Exchange on Wednesday. Stocks dropped on Wall Street for the third straight day on Thursday
The pullback follows a broad sell-off in markets overseas as rising infections in Europe led governments in France and Britain to impose new measures to contain the coronavirus. Treasury yields were lower, while the price for U.S. crude oil also headed lower.
Stocks have been mostly climbing this month, but have pulled back this week as talks between Democrats and Republicans in Washington over another economic stimulus package drag on, dimming investors' hopes for a deal that can deliver more aid for the U.S. economy in the near term.
The government's latest weekly tally of unemployment claims underscores how the economy continues to be hobbled by the pandemic and recession that erupted seven months ago.
The Labor Department said Thursday that the number of Americans seeking unemployment benefits rose last week to 898,000, a historically high number that exceeds analysts forecasts.
The report follows recent data that have signaled a slowdown in hiring. The economy is still roughly 10.7 million jobs short of recovering all the 22 million jobs that were lost when the pandemic struck in early spring.
Investors continued to weigh the latest batch of earnings reports from major U.S. companies. Several reports so far have been better than expected, but the health crisis continues to cloud the outlook.
United Airlines slumped 3.4 percent Thursday after reporting that its revenue plummeted over the summer.
Morgan Stanley was up 1.2 percent after the investment bank said its third-quarter profit jumped 25 percent thanks to a surge in trading revenue and higher fees.
Walgreens Boots Alliance rose 4 percent after the drugstore chain's latest quarterly results topped Wall Street's forecasts.
Across the S&P 500, analysts are expecting companies to report another drop in profits for the summer from year-ago levels. But they´re forecasting the decline to moderate from the nearly 32 percent plunge from the spring as the economy has shown signs of improvement.
A resurgence in coronavirus infections in Europe has also given investors cause to turn cautious. Fears are rising that Europe is running out of chances to control the new outbreak, as infections hit record daily highs in Germany, the Czech Republic, Italy and Poland.
France slapped a 9pm curfew on many of its biggest cities and Londoners face new travel restrictions as governments take increasingly tough actions.
The limits on public life are not as strict as the full lockdowns imposed during the spring, but will stunt or even reverse the economy´s recovery from recession, experts say.