Stocks – Wall Street Opens Lower as Jobless Claims Stay Stubbornly High

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Investing.com — U.S. stock markets opened lower for a third straight day after data showing initial jobless claims fell more slowly than expected than last week, further stoking fears that the economy will struggle to rebound even as the country moves out of lockdown.

By 9:35 AM ET, the Dow Jones Industrial Average was down 279 points or 1.2% at 22,969 points, while the S&P 500 was down 1.1% and the Nasdaq Composite was down 0.9%. 

Earlier, the Labor Department had said initial jobless claims fell to 2.98 million last week – the first week since March that they’ve been below 3 million but still considerably above expectations of 2.50 million.  The numbers took the total number of initial claims since the pandemic erupted to over 36 million, or one quarter of the workforce.

Analysts at Pantheon Macroeconomics said the numbers showed a disappointingly slow decline in the rate of new claims, and said the number is now unlikely to drop below 1 million before the end of June. 

“That said, the proportion of the previous week’s initial claims then appearing in the continuing claims numbers a week later has fallen for seven straight weeks, so hiring is not completely dead,” Pantheon’s Ian Shepherdson said in a note to clients.

The market was also rocked early Thursday by more aggressive rhetoric toward China from President Donald Trump. Trump told Fox Business News that: “”We could cut off the whole relationship” with China, something he said would “save” the U.S. $500 billion a year. 

Already this week, Trump has directed a federal pension program to divest its holdings of Chinese equities and signed an executive order extending a ban on U.S. companies doing business with telecoms company Huawei until the end of May 2021. 

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