S&P 500 collapses after jobless claims hit 18-month low

Sept. 9 (Reuters) – The S&P 500 ended lower on Thursday after weekly jobless claims fell to an almost 18-month low, allaying fears of a slowing economic recovery, but also fueling concerns that the Fed could act sooner than expected to reduce its accommodation strategies.

The Labor Department said initial claims for state unemployment benefits fell from 35,000 to 310,000 seasonally adjusted for the week ended September 4, the lowest level since mid-March 2020. That suggests that employment growth could be hampered by labor shortages rather than by a cooling in demand for workers.

Microsoft, Apple and Amazon each fell, all three among the stocks weighing the most on the S&P 500 and Nasdaq.

The S&P 500 Real Estate and Health Care indices were among the worst performers of 11 sectors, while Financials and Materials posted modest gains.

JPMorgan, Wells Fargo, Citi Group and Morgan Stanley each rose, following a slight increase in benchmark bond yields in the wake of loss data.

“The problem with the market these days is that it spins more than it moves. Today, because of the job demand report, everyone is buying cyclical stocks, ”said Jay Hatfield, managing director of Infrastructure Capital Management in New York. “We see it as a limited market, between 4,400 and 4,600 (on the S&P 500). “

Investors have grown more concerned in recent sessions after a recent monthly jobs report showed a slowdown in hiring in the United States, suggesting that the economic recovery may falter faster than expected. Uncertainty over when the U.S. Federal Reserve will scale back massive measures adopted last year to protect the economy from the coronavirus pandemic has also weighed on sentiment.

Unofficially, the Dow Jones Industrial Average fell 147.25 points, or 0.42%, to 34,883.82, the S&P 500 lost 20.44 points, or 0.45%, to 4,493.63 and the Nasdaq Composite lost 38.17 points, or 0.25%, to 15,248.46.

Lululemon Athletica has skyrocketed after providing strong annual forecasts as demand for its yoga pants remains strong despite the easing of restrictions on coronaviruses.

Reports that Beijing has slowed down approval of all new online video games caused shares of US-listed game stocks to fall by more than 1% Activision Blizzard Inc, Electronic Art Inc and Take-Two Interactive Software Inc.

Digital Realty slipped after data center REIT announced a public offering of 6.25 million shares.

Reporting by Noel Randewich; Additional reporting by Shashank Nayar in Bengaluru; Editing by Anil D’Silva, Arun Koyyur and Aurora Ellis

Our Standards: Thomson Reuters Trust Principles.