Stocks fell on Thursday, signaling that technology stocks will lead the falls for major indices, with investors awaiting profits and evaluating new data on the US labor market.
The S&P 500 fell 0.8%, while the Dow Jones Industrial Average fell 0.7%. The high-tech Nasdaq Composite has continued its decline since Wednesday, falling 1.1%.
Applications for unemployment benefits – an indicator of layoffs – remained above the pre-coronavirus pandemic peak of 695,000. New unemployment insurance claims rose to 861,000 last week, interrupting a downward trend that pointed to an improvement in the labor market. Economists had expected declines in claims.
Stocks took a breath in recent sessions after rising largely from 2021. Some investors were taken aback by a rapid increase in government bond yields, which appeared to topple tech stocks that benefited from years of low interest rates . Money managers are also concerned with high ratings.
Even so, many investors remain optimistic about the outlook for stocks. They point to the likely arrival of more fiscal stimulus as a factor that will boost economic growth and higher gains in 2021, alongside the reopening of sectors that were hit hard by the pandemic.