Dow sinks 406 points as tech stocks resume volatile sell-off
- US stocks sank in turbulent Thursday trading as falling tech giants dragged on benchmark indexes.
- Tech names had rebounded on Wednesday but resumed their downward spiral as investors shunned their still lofty valuations.
- Traders also mulled weekly jobless-claims data that signaled lasting pain in the US labor market. Claims totaled 884,000 for the week that ended on Saturday, missing the economist estimate of 850,000.
- Oil fell after the American Petroleum Institute reported that US stockpiles increased by nearly 3 million barrels. West Texas Intermediate crude sank as much as 2.9%, to $36.95 per barrel.
- Watch major indexes update live here.
US equities slipped on Thursday as tech stocks faltered after a brief rally, ending the day near session lows.
The popular sector has taken center stage this week, following its collapse before Labor Day weekend. Tech names pushed indexes higher on Wednesday as investors scooped up shares at lowered levels. But a short-lived upswing on Thursday gave way to heavy selling and a broader market slump.
Mega-caps including Apple, Microsoft, and Amazon led the decline. McDonald's, Disney, and Oracle were among the few large-cap names spared in the market decline. Energy stocks were the only group to sink further than tech names, while real-estate and consumer cyclical shares dropped the least.
Here's where US indexes stood at the 4 p.m. ET market close on Thursday:
- S&P 500: 3,339.19, down 1.8%
- Dow Jones industrial average: 27,534.58, down 1.5% (406 points)
- Nasdaq composite: 10,919.59, down 2%
Traders also digested worse-than-expected jobless-claims data. Claims for unemployment benefits in the week that ended on Saturday reached an unadjusted total of 884,000. Economists surveyed by Bloomberg had expected weekly claims to fall to 850,000. Thursday's report signaled continued pain in the labor market even after the unemployment rate declined in August.
Continuing claims, which track the number of Americans receiving unemployment benefits, slightly increased to 13.4 million. Economists had expected continuing claims to dip below 13 million.
Investor hopes for near-term stimulus were dashed on Thursday after Senate Democrats blocked Republicans' $500 billion proposal. The bill aimed to expand unemployment benefits by $300 a week. Democrats united against the measure and continued to call for a bill with more than $2 trillion in aid.
The frothy price action boosted the Cboe Volatility Index, a popular gauge of expected market volatility, as much as 6% during the session. The VIX closed just below 30, a key psychological level for those betting on continued market chaos.
Tesla shares erased moderate morning gains and closed slightly below its Wednesday levels.
Another popular electric-vehicle stock, Nikola Motors, tanked after Hindenburg Research published a scathing short-seller report alleging that Nikola overhyped its electric truck's capabilities and filled its multibillion-dollar order book "with fluff."
AstraZeneca retraced some of its Wednesday slide before falling into a loss. The biotech company had tumbled after pausing a trial of its coronavirus vaccine candidate because a participant had an adverse reaction. CEO Pascal Soriot said on Thursday that the company still aimed to know before the end of the year whether the vaccine protects people against the coronavirus.
Spot gold sank modestly after leaping as high as $1,966.60. The precious metal has remained in a narrow trading range of $1,900 to $2,000. The US dollar strengthened through the day, and Treasury yields fell.
Oil declined after the American Petroleum Institute reported that US stockpiles increased by nearly 3 million barrels last week, Bloomberg reported. West Texas Intermediate crude tumbled as much as 2.9%, to $36.95 per barrel. Brent crude, oil's international standard, fell 2.5%, to $39.76 per barrel, at intraday lows.
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