The market opened lower on Thursday, but recovered its losses and turned positive despite stocks taking a hit from worse-than-expected weekly jobs data and fears over a resurgence in coronavirus cases across the U.S.
Another 1.5 million Americans filed for unemployment last week.
Spencer Platt/Getty Images
The Dow Jones Industrial Average was flat by midday on Thursday, while the S&P 500 was up 0.1% and the tech-heavy Nasdaq Composite gained 0.4%.
Stocks initially opened lower, with the Dow down 200 points, on the back of disappointing jobless claims data: Another 1.5 million Americans filed for unemployment in the week ending June 13—higher than the 1.3 million expected.
Even though claims have fallen dramatically from their peak in March, when 6.9 million people filed in just one week, this week’s data underscores that the economy will not bounce back quickly after the coronavirus pandemic is over.
Investor sentiment has also taken a hit from fears of a resurgence in coronavirus infections across the country: Many states reopening, such as Arizona and Texas, are seeing record numbers of new cases.
Parts of the U.S. that have started reopening but are now seeing spikes in new cases are “on the cusp of losing control” over the virus, former FDA Commissioner Dr. Scott Gottlieb warned CNBC.
Shares of companies that would benefit from the economy reopening—including airlines, retailers and cruise operators—led the markets lower at the open but later recovered their losses and moved higher.
“The overnight volatility we have seen comes as rising COVID case counts around the world and around the country start to weigh on investor sentiment,” according to a note from Bespoke Investment Group. “After the sharp rally, investors are looking to reassess where things stand in terms of government stimulus, economic growth, earnings, and global health trends.”
The Dow and S&P snapped their three-day winning streak on Wednesday, amid fears over a resurgence in coronavirus cases. Stocks that would benefit from an economic reopening fell, while popular tech stocks like Amazon and Netflix finished higher. The market is still up more than 2% this week, however, after a sharp decline in the week prior.