- US stocks dropped on Thursday after economic data detailed the US's biggest gross domestic product contraction on record.
- The country's economy shrank at an annualized rate of 33% in the second quarter, the Commerce Department announced Thursday. Economists expected a contraction of roughly 35%.
- Jobless claims data pointed to lasting virus fallout. Claims ticked higher for the second-straight week to 1.43 million, still beating economists 1.45 million expectation.
- Investors braced for earnings from major tech companies including Apple, Amazon, Alphabet, and Facebook after the close.
- Watch major indexes update live here.
US equities slipped on Thursday as new data revealed the full extent of the coronavirus's damage to the nation's economy.
The country's gross domestic product fell at an annualized rate of 33% through the second quarter, the Commerce Department announced Thursday. The reading is the worst in records dating back to the 1940s, marking the US's biggest economic slump in modern history.
The contraction slightly beat expectations. Economists surveyed by Bloomberg anticipated a roughly 35% annualized shrinkage. Experts largely expect the second quarter to serve as the trough of the nation's economic downturn, though a resurgence in virus cases and signs of weakening consumer sentiment threaten to prolong an already deep recession.
Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Thursday:
- S&P 500: 3,220.04, down 1.2%
- Dow Jones industrial average: 26,116.58, down 1.6% (423 points)
- Nasdaq composite: 10,473.10, down 0.7%
Elsewhere in economic data, weekly jobless claims registered a second straight week of increases after steadily declining for four months. Claims rose by 12,000 to 1.43 million in the week ended on Saturday, the Labor Market said Thursday. Economists expected a larger increase to 1.45 million claims, according to Bloomberg data.
Continuing claims, which track Americans already receiving unemployment benefits, climbed by 867,000 to 17.06 million in the week ended July 18.
"Investors should be prepared for a choppy process of data digestion, but not be surprised that the market feels the future is better than the present and that unprecedented stimulus and liquidity exist to drive valuations," David Bahnsen, chief investment officer of financial planning firm The Bahnsen Group, said in a note.
Traders also prepared for quarterly reports from nearly all tech mega-caps. Apple, Amazon, Alphabet, and Facebook are slated to release their quarterly figures after the close, offering investors insight into how the most crowded growth stocks held up through the pandemic. The four tech giants all dipped in early trading and lead indexes lower.
A handful of companies traded higher after reporting earnings Thursday morning. UPS soared after beating expectations for profit and revenue amid strong delivery demand. P&G similarly toppled estimates as cleaning product sales surged through the quarter.
Kodak continued to rally after the previous two sessions saw shares spike about 1,200%. The camera company's shares swung higher on Tuesday after announcing it received a $765 million government loan to produce drug ingredients in response to coronavirus.
Gold prices paused after a nine-day winning streak placed the precious metal at record highs.
Oil prices declined amid continued worries of a demand slump. West Texas Intermediate crude fell as much as 6.2%, to $38.72 per barrel. Brent crude, oil's international standard, slid 5.4%, to $41.38 per barrel, at intraday lows.
Thursday's busy session follows a similarly eventful trading day. Major indexes notched moderate gains on Wednesday after the Federal Reserve held interest rates near zero and indicated it would use all of its policy tools to facilitate a full economic recovery. Jerome Powell noted that a rise in virus infection rates was already dragging on the economic rebound, and hinted at forward guidance possibly being used for further easing efforts in the future.
"With rates already so low, monetary policy is becoming less effective at stimulating the economy," Seema Shah, chief strategist at Principal Global Investors, said. "Policymakers can soften a downturn, but ultimately, they do not have the power to prevent it."
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