New York (CNN Business)The Dow and the S&P 500 are flashing red on Thursday. Investors are still wrapping their heads around the morning’s economic data including the GDP report, which finally put a number on just how badly the economy fared during the spring lockdown, as well as an increase in weekly jobless claims.
Wall Street started the trading day lower but recovered some of its losses, even as the Dow (INDU) and S&P 500 (SPX) remained in negative territory around midday. The Dow was more than 200 points, or 0.9%, lower, while the S&P — the broadest measure of the stock market — fell 0.5%.The biggest stock declines were in energy — as oil prices fell — and basic materials sectors.
The tech-heavy Nasdaq Composite (COMP), meanwhile, recovered from its earlier slump and climbed 0.4%Adding to the morning’s air of uncertainty, before the opening bell President Donald Trump tweeted floating the idea of delaying November’s presidential election. Though he has no authority to do so — it’s Congress that has the power to set voting dates — the message provides an opening that he and his supporters might refuse to accept the results. Read MoreUS gross domestic product — the broadest measure of the economy — plummeted at an annual rate of 32.9% between April and June, the worst drop on record. While the decline wasn’t as bad as economists had predicted, it hammered home just how much the economy suffered at the height of the pandemic lockdown.The economy is expected to rebound in the current, third quarter of the year. But increasing Covid-19 infections across the country that could hold back the pace of the recovery.Meanwhile, the Labor Department reported a second-straight uptick in first-time applications for unemployment benefits Thursday morning. This is worrying because it could signify a slowdown in the labor market recovery. The bottom line is that the US economy runs on consumer spending, but people spend less money when they are unemployed.Aside from macroeconomic news, investors remain focused on earnings season: it’s a big day for big tech.
Just one day after the CEOs of Apple (AAPL), Amazon (AMZN), Google (GOOGL) and Facebook (FB) spoke to Congress about unfair competition practices in their industry, all four companies are due to report their second-quarter results.Shares of Apple and Amazon traded in the green around midday, indicating that investors are hoping for an earnings surprise on the upside.
Source: edition.cnn.com