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Wall Street closed sharply lower on Thursday owing to weak labor market data and heightening geopolitical tensions between the United States and China. Selling pressure on the technology sector also pulled down the overall market. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) tumbled 1.3% or 353.51 points to close at 26,652.33, reversing its three-day winning streak. Notably, 23 components of the 30-stock blue-chip index ended in the red while 7 finished in green. The Nasdaq Composite ended at 10,461.42, plummeting 2.3% or 244.71 points.
Meanwhile, the S&P 500 tanked 1.2% to end at 3,235.66, reversing its four-day winning run and marking its worst single-day performance in a month. The Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) plunged 2.6%, 1.6% and 1.5%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in negative territory while three in positive territory.
The fear-gauge CBOE Volatility Index (VIX) was up 7.2% to 26.08. A total of 10.77 billion shares were traded on Thursday, lower than the last 20-session average of 11.14 billion. Decliners outnumbered advancers on the NYSE by a 1.18-to-1 ratio. On Nasdaq, a 1.61-to-1 ratio favored declining issues.
Weak Labor Market Data
The Department of Labor reported that Americans who filed for unemployment benefit for the first time came in at 1.416 million for the week ended Jul 18. The consensus estimate was 1.319 million. Notably, previous week's estimate was revised upwardly to 1.307 million from 1.3 million reported earlier.
For eighteen consecutive weeks, initial jobless claims stood more than 1.3 million. However, this was the first increase in weekly jobless applications after a decline of fifteen successive weeks. On the other hand, continuing claims — the number of people that have received unemployment benefit at least one time earlier — decreased 1.107 million to 16.197 million for the week ended Jul 11.
Technology Sector Pulls Down Market
Several technology bellwethers have plummeted to pull down the sector and the overall market. Microsoft Corp. (MSFT - Free Report) reported fourth-quarter fiscal 2020 non-GAAP earnings of $1.46 per share, which beat the Zacks Consensus Estimate by 5.8%. Revenues of $38.03 billion surpassed the Zacks Consensus Estimate by 3.95%.
However, the company reported its transactional license purchasing continued to slow and its subsidiary LinkedIn was negatively impacted by the weak job market due to coronavirus-induced lockdowns. Moreover, its cloud computing business unit Azure reported less than 50% growth first time ever.
The lingering economic and geo-political conflicts between the United States and China have heightened recently. On Jul 23, U.S. Secretary of State Mike Pompeo slammed China over international abuses warning the Asian economic giant that United Sates will no longer tolerate China's double standard.
Per Pompeo, “The truth is that our policies, and those of other free nations, resurrected China’s failing economy, only to see Beijing bite the international hands that fed it.”
On Jul 22, The U.S. government has instructed China to close its consulate in Houston citing the consulate was used for spying purposes. The U.S. government has already imposed trade sanctions on 11 major Chinese companies on accounts of violating human rights in China.
On Jul 21, the Department of Justice indicted two Chinese hackers of stealing trade secrets and trying to steal research on drugs for potential coronavirus treatment.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan. The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Image: Bigstock
Stock Market News for Jul 24, 2020
Wall Street closed sharply lower on Thursday owing to weak labor market data and heightening geopolitical tensions between the United States and China. Selling pressure on the technology sector also pulled down the overall market. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) tumbled 1.3% or 353.51 points to close at 26,652.33, reversing its three-day winning streak. Notably, 23 components of the 30-stock blue-chip index ended in the red while 7 finished in green. The Nasdaq Composite ended at 10,461.42, plummeting 2.3% or 244.71 points.
Meanwhile, the S&P 500 tanked 1.2% to end at 3,235.66, reversing its four-day winning run and marking its worst single-day performance in a month. The Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) plunged 2.6%, 1.6% and 1.5%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in negative territory while three in positive territory.
The fear-gauge CBOE Volatility Index (VIX) was up 7.2% to 26.08. A total of 10.77 billion shares were traded on Thursday, lower than the last 20-session average of 11.14 billion. Decliners outnumbered advancers on the NYSE by a 1.18-to-1 ratio. On Nasdaq, a 1.61-to-1 ratio favored declining issues.
Weak Labor Market Data
The Department of Labor reported that Americans who filed for unemployment benefit for the first time came in at 1.416 million for the week ended Jul 18. The consensus estimate was 1.319 million. Notably, previous week's estimate was revised upwardly to 1.307 million from 1.3 million reported earlier.
For eighteen consecutive weeks, initial jobless claims stood more than 1.3 million. However, this was the first increase in weekly jobless applications after a decline of fifteen successive weeks. On the other hand, continuing claims — the number of people that have received unemployment benefit at least one time earlier — decreased 1.107 million to 16.197 million for the week ended Jul 11.
Technology Sector Pulls Down Market
Several technology bellwethers have plummeted to pull down the sector and the overall market. Microsoft Corp. (MSFT - Free Report) reported fourth-quarter fiscal 2020 non-GAAP earnings of $1.46 per share, which beat the Zacks Consensus Estimate by 5.8%. Revenues of $38.03 billion surpassed the Zacks Consensus Estimate by 3.95%.
However, the company reported its transactional license purchasing continued to slow and its subsidiary LinkedIn was negatively impacted by the weak job market due to coronavirus-induced lockdowns. Moreover, its cloud computing business unit Azure reported less than 50% growth first time ever.
Meanwhile, smartphone and tablet giant Apple Inc. (AAPL - Free Report) is facing consumer protection investigations in several states. Consequently, Microsoft and Apple plunged 4.4% and 4.6%, respectively. Both stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
U.S.- China Tensions Heightens
The lingering economic and geo-political conflicts between the United States and China have heightened recently. On Jul 23, U.S. Secretary of State Mike Pompeo slammed China over international abuses warning the Asian economic giant that United Sates will no longer tolerate China's double standard.
Per Pompeo, “The truth is that our policies, and those of other free nations, resurrected China’s failing economy, only to see Beijing bite the international hands that fed it.”
On Jul 22, The U.S. government has instructed China to close its consulate in Houston citing the consulate was used for spying purposes. The U.S. government has already imposed trade sanctions on 11 major Chinese companies on accounts of violating human rights in China.
On Jul 21, the Department of Justice indicted two Chinese hackers of stealing trade secrets and trying to steal research on drugs for potential coronavirus treatment.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>