Dow slips, Nasdaq gains as surge in jobless claims reinforces need for financial aid before year end

U.S. stock indexes finished mixed Thursday as rise in weekly jobless benefit claims and few signs of progress on another fiscal stimulus package in Congress were offset by hopes for an imminent rollout of a coronavirus vaccine to support the economic recovery.

How are stock benchmarks performing?
  • The Dow Jones Industrial Average DJIA, -0.23% fell 69.55 points, or 0.2%, at about 29,999.26.
  • The S&P 500 index SPX, -0.13% slipped 4.72 points, 0.1%, at 3,668.10.
  • The Nasdaq Composite Index COMP, +0.54% swung 66.85 points, or 0.5%, higher to 12,405.81, after hitting an intraday nadir near the open at 12,214.74.
  • The Russell 2000 RUT, +1.08% rose 1%.

On Wednesday, the Nasdaq saw its worst daily decline in six weeks.

What’s driving the market?

U.S. stocks pared early losses to end mixed Thursday, with the Nasdaq Composite booking gains, despite a report on employment signaling labor-market weakness amid a resurgence of coronavirus cases.

New applications for U.S. unemployment benefits leapt in early December to a near three-month high, likely due to an increase in layoffs as coronavirus cases surged. Claims totaled 853,000, rising from the 716,000 a week ago, the Labor Department reported Thursday. State continuing jobless claims rose 230,000 to 5.76 million in late November.

“These types of data points are pretty challenging for the near-term picture for equities, and calls into question the recovery we’re seeing,” said Matt Forester, chief investment officer of BNY Mellon’s Lockwood Advisors, in an interview.

Chris Larkin, managing director at E-Trade Financial said the claims numbers provided “a stark reality of shutdowns across the country which could fuel volatility in the weeks ahead,” but noted that the jump in jobless claims “may reignite negotiations.”

In other U.S. economic news, the consumer-price index rose 0.2% in November, and core CPI, excluding volatile food and energy, was up 0.2%

Negotiations in Congress on another financial-aid package for workers and businesses, as well as legislation to fund government operations, have thus far sputtered in Washington. A plan is needed before year-end to prevent about 12 million Americans from losing unemployment benefits and stop families across the country from getting evicted from their homes, but after months of talks there is little sign of agreement between the Republican controlled Senate and the Democrat led House.

However, the U.S. Federal Drug Administration is holding a meeting of its Vaccines and Related Biological Products Advisory Committee Thursday to weigh the risks of BioNTech BNTX, +5.48%  and Pfizer Inc.’s PFE, -0.29%  experimental COVID-19 vaccine before voting on whether the FDA should authorize the vaccine. A similar meeting for Moderna Inc.’s  MRNA, -0.57% vaccine candidate has been scheduled for Dec. 17. 

The global tally of confirmed cases of the coronavirus that causes COVID-19 rose to 68.9 million on Thursday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.57 million. The U.S. has the highest case tally in the world at 15.4 million and on Wednesday set a record of more than 3,000 deaths, according to a New York Times tracker.

“In the meantime, the vaccines haven’t arrived and we’re experiencing the worst death rates since the beginning of the crisis,” said Forester.

Markets also were considering the ECB decision to boost the size of the pandemic emergency purchase program by €500 billion and extend its targeted longer-term refinancing operation for banks.

In Brexit developments, the U.K. and EU extended talks till Sunday after a three-hour dinner between Britain’s prime minister Boris Johnson and European Commission President Ursula von der Leyen, in Brussels Wednesday night.

Johnson warned the U.K. should be prepared to leave the European Union without a trade deal in hand.

Which stocks are in focus?
  • Airbnb Inc. ABNB, +112.81%, the lodging-booking platform, priced its initial public offering at $68 a share Wednesday, the Wall Street Journal reported, but shares soared nearly 143% in its first day as a public company. The stock opened at $146 and hit a high of $165. At $165, Airbnb has a market capitalization of $114.8 billion.
  • Twitter Inc. TWTR, +8.43% rose 8.4% after the social-media company said it added a feature allowing users to put their tweets in Snapchat and Instagram.
  • J.M. Smucker Co.  SJM, -1.85% said Thursday it still expects 2021 sales to be flat to up 1% and adjusted per-share earnings to range from $8.35 to $8.65. The company’s stock lost 1.9%.
  • Facebook Inc. FB, -0.29% shares were off 0.3% after a consortium of 48 attorneys general and the U.S. government filed antitrust lawsuits against it Wednesday, claiming it committed unlawful, anticompetitive acts that put rivals.
  • France’s data privacy watchdog fined Google-parent Alphabet Inc. GOOG, -0.49% GOOGL, -0.57% and Inc. AMZN, -0.09% for breaching the country’s rules on online advertising trackers. Google shares fell about 0.5%. Amazon’s stock were flat.
  • Tenet Healthcare Corp.  THC, +22.33% said Thursday it has agreed to acquire a portfolio of up to 45 ambulatory surgery centers from SurgCenter Development for $1.1 billion in cash, plus the assumption of $18 million of debt. Shares of Tenet surged 22%.
  • Shares of Immumetp Ltd.  IMMP, +163.43%,  an Australian biotech with a Nasdaq listing, soared 163% Thursday, after the company reported positive results from a trial of a treatment for metastatic breast cancer.
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