The Dow Jones Industrial Average was down 548.34 points today, or 1.9%, at 28,552.16, after dropping more than 800 points at its session low. The S&P 500 slipped 91.57 points, or 2.6%, to 3,489.27. The Nasdaq Composite tumbled 463.53 points, or 3.8%, to 11,592.91. All three indexes are on track to record losses for the week.
On Wednesday, Dow surged 454.84 points, or 1.6%, ending at 29,100.50, or 1.5% away from its Feb. 12 closing high of 29,551.42. The S&P 500 index climbed 54.19 points, or 1.5%, to settle at a record 3,580.84, its 22nd record close this year. The Nasdaq Composite Index advanced 116.78 points to close at a record 12,056.44, a gain of 1%, and its 43rd record close of the year.
After a day of records for the S&P 500 and the Nasdaq Composite on Wednesday, investor optimism waned as large-capitalization technology-related stocks led losses on Thursday.
Doubts about traction for further fiscal stimulus from Washington lawmakers may be one factor discouraging investors who have been betting on Republicans and Democrats striking a deal later this month to offer additional relief to American consumers and businesses. On Tuesday, House Speaker Nancy Pelosi said Democrats and Republicans still have “serious differences,” following a brief phone call.
Investors have also been calling for a rotation away from the leading tech stocks to the broader market in the hopes that it would strengthen the stock-market rally’s foundations. “There is a sort of benign way that this excess can be corrected through a process of rotation,” said Liz Ann Sonders, chief investment strategist at Schwab, in an interview. She said positive economic data could lay the path for a more sustainable rally.
Thursday’s round of economic data continued to point to a steady recovery, though the prospects for the labor market were unclear ahead of Friday’s official jobs report.
New applications for unemployment benefits in the latest weekly period ending in Aug. 29 fell 130,000 to a seasonally adjusted 881,000 or lower than the consensus estimate of 940,000 but this was after the Labor Department said last week it tweaked its seasonal adjustment method amid the COVID-19 pandemic. The unadjusted or real number of initial jobless claims rose slightly to 833,353 from 825,761, indicating there was barely any change last week in how many people are applying for benefits.