Wall Street slips as jobless claims climb back to one million

(Reuters) – The S&P 500 and the Dow slipped further on Thursday after weekly jobless claims rose unexpectedly back above the 1 million mark last week, lending weight to the Federal Reserve’s view of a difficult road to economic recovery.

The benchmark index retreated from a record level a day earlier after minutes from the Fed’s latest policy meeting showed the labor market’s swift rebound in May and June had likely slowed and that policymakers would stick with aggressive stimulus measures for a much longer period.

The number of Americans filing for a new claim for unemployment benefits rose to 1.106 million in the week ended Aug. 15 after slipping below the 1 million level for the first time since the start of the pandemic, in the prior week.

A separate report from the Philadelphia Fed showed business conditions index fell more than expected to 17.2 points in August from 24.1 points in July.

“In the short term, if the jobless claim numbers come out worse than expected, I could see that pushing Congress to get another stimulus package going, maybe put more priority,” said Jeffrey Corliss, managing director and partner at Connecticut-based RDM Financial Group at Hightower Securities LLC.

“The Fed minutes brought a reality check that they’re seeing things out there (that) they’re concerned about.”

Economically sensitive financial and energy sectors posted the biggest declines among major S&P sectors. Real estate, technology and communications services outperformed.

Despite signs that parts of the economy were still far away from pre-pandemic levels, the benchmark S&P 500 index completed its fastest recovery from a bear market this week, joining the Nasdaq in scaling new peaks.

The Dow, however, is more than 6% below its February high.

Airline stocks took a hit, with the S&P 1500 airlines index dropping 2.4% after American Airlines Group Inc revealed plans to suspend flights to 15 U.S. airports in October as travel demand remains low.

At 10:08 a.m. ET, the Dow Jones Industrial Average was down 78.78 points, or 0.28%, at 27,614.10 and the S&P 500 was down 3.68 points, or 0.11%, at 3,371.17. The Nasdaq Composite was up 37.47 points, or 0.34%, at 11,183.93.

Nvidia Corp slipped 0.2% after results from the data center business of the rising semiconductor industry star disappointed some investors.

Intel Corp rose 2.2% after announcing a $10 billion share buyback plan.

L Brands Inc rose 7% after reporting a surprise quarterly profit, boosted by strong demand for Bath & Body Works’ products as well as higher online sales of Victoria’s Secret lingerie.

Declining issues outnumbered advancers for a 3.33-to-1 ratio on the NYSE and for a 3.10-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and no new low, while the Nasdaq recorded 16 new highs and 13 new lows.

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