Dow Down 400+ Points as Bears Target Tech, Energy; Stimulus Hopes Fade

This post was originally published on this site – Wall Street plunged Thursday as big tech gave up early-day gains and signs of a slowdown in the labor market raised concerns about the strength of the recovery at a time when Congressional efforts to make progress on a stimulus package failed to win enough votes to proceed. 

The Dow Jones Industrial Average fell 1.45%, or 406 points. The S&P 500 was down 1.77%, while the Nasdaq Composite slumped 2%.

In a sign that the resilience in tech could be under threat, Apple (NASDAQ:AAPL) pared gains to close nearly 3% lower as investors seemingly take profit on the stock ahead of the new iPhone launch expected next month.

The other four stocks that make up the Fab 5 turned negative, with Facebook (NASDAQ:FB) Alphabet (NASDAQ:GOOGL) (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) closed down more than 1%.

Zscaler (NASDAQ:ZS) also ended lower after rising in early trade following quarterly results that topped estimates on both the top and bottom lines.

Energy also led the pace downward, falling 3% as oil prices slipped after U.S. crude inventories unexpectedly rose last week, renewing worries about the strength of crude demand.

Investor sentiment was also hurt by worries job growth appears to be slowing just as the prospect of another wave of coronavirus stimulus dimmed. The watered-down coronavirus stimulus plan proposed by Republicans failed to get the votes needed to advance in the Senate, CNBC reported.   

The Labor Department said the number of first-time filers for unemployment benefits came in at 884,000 for the week ended Aug. 29, missing economists’ forecast for a fall to 850,000.

“Alongside the stalling in initial claims for regular state unemployment benefits, claims for Pandemic Unemployment Assistance rose by a hefty 91K, the fourth straight increase, so total initial claims increased,” Pantheon Macroeconomic said.

Elsewhere, airlines mostly sidestepped the weakness on hopes that the aviation industry is set to receive more federal aid. Senate Republican John Cornyn on Wednesday pledged to push Congress to include more fiscal support in the stimulus bill.

American Airlines (NASDAQ:AAL) ended 0.3% lower, Delta Air Lines (NYSE:DAL) ended flat, while United Airlines (NASDAQ:UAL) closed 1% higher.

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