Dow Pares Some Losses But Remains in Red on Tech Wreck

imageStock Markets14 hours ago (Oct 15, 2020 03:01PM ET)

(C) Reuters.

By Yasin Ebrahim – The Dow pared some losses Thursday, but remained in the red as technology stocks slumped and weakness in the labor market exacerbated concerns about the pace of the recovery at a time when further stimulus is unlikely in the immediate future.

The Dow Jones Industrial Average fell 0.12%, or 35 points. The S&P 500 was down 0.30%, while the Nasdaq Composite slumped 0.75%.

The Fab 5 led the broader tech stocks lower as investors appear to be taking profit on big tech following the recent run higher, with analysts warning of a choppy month ahead.

“[O]ur optics still suggest a choppy bottoming process in the October-November timeframe with a floor around/above 3050-3150 SPX,” Technical Strategist Dan Wantrobski said.

Apple (NASDAQ:AAPL), (NASDAQ:AMZN), Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) traded in the red.

Investor sentiment was also hurt by data suggesting the resilience seen in the labor market could start to give away without further stimulus to support the broader economy.

The Labor Department said 898,000 Americans filed for unemployment insurance, up 53,000 from the prior week’s 845,000. That was above economists’ estimates for 820,000 claims and the highest since Aug. 22.

“The bottom line here is that the state of the labor market is contingent on the virus picture, so we can’t rule out further increases, and at this point we’d regard a zero print for October payrolls as a decent result; a clear decline is entirely possible,” Pantheon Macroeconomics said.

A day after conceding that stimulus was unlikely to be rolled out before the Nov. 3 election, Treasury Secretary Steven Mnuchin said he would continue talks with House Speaker Nancy Pelosi on Thursday to resolve differences, particularly on funding for a national testing plan, which remains a sticking point.

Healthcare stocks were also among the biggest losers on the day, led by 20% slump in Vertex Pharmaceuticals (NASDAQ:VRTX) after it stopped testing on a protein deficient treatment amid safety concerns.

Walgreens Boots Alliance (NASDAQ:WBA) rose 3% after reporting better-than-expected quarterly results, underpinned by higher U.S. sales.

Elsewhere on the earnings front, United Airlines Holdings Inc (NASDAQ:UAL) slumped more than 4% after its second-quarter results, released late-Wednesday, fell short of Wall Street estimates as the pandemic continues to weigh on air travel.

Energy, meanwhile, was pressured by a fall in oil prices as concerns about demand in the wake of a resurgence in the spread of Covid-19 offset data showing a larger-than-expected draw in weekly U.S. crude inventories.

In other news, cloud computing company Fastly (NYSE:FSLY) plunged 27% after trimming its third-quarter guidance, citing an uncertain geopolitical backdrop and lower-than-expected demand.

Dow Pares Some Losses But Remains in Red on Tech Wreck

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