Stocks slip on Wall Street as a 4-day rally peters out


A currency trader walks by the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea, Thursday, June 4, 2020. Asian stock markets are mixed after Wall Street rose on better U.S. jobs and manufacturing data than expected.(AP Photo/Lee Jin-man)

(AP) –

Stocks gave up some early gains and were lower on Wall Street in afternoon trading as the market takes a pause following its longest winning streak in nearly four months.

The S&P 500 was down 0.5%, as of 1:30 p.m. Eastern time, after earlier being on track for its first five-day winning streak since December. The index is about 8% below its record set in February after earlier being down nearly 34%.

A report showed that the number of U.S. workers filing for unemployment benefits eased for a ninth straight week, roughly in line with the market’s expectations. But economists saw pockets of disappointment after the total number of people getting benefits rose slightly. That number had dropped the prior week, which had raised hopes that some companies were rehiring workers.

The next big piece of economic data will land early Friday, when the Labor Department releases its monthly jobs report for May. It’s expected to show that employers slashed 8.5 million jobs last month and that the unemployment rate jumped from 14.7% to 19.8%.

“The May unemployment rate will likely be the worst one and it will get better from there,” said Randy Frederick, vice president of trading and derivatives at Schwab Center for Financial Research. “The market should have it baked in for the most part.”

The Dow Jones Industrial Average fell 67 points, or 0.2%, to 26,201, and the Nasdaq composite was down 0.6%.

Losses for technology stocks and health care companies were some of the heaviest weights on the market. They had been some of the steadiest earlier this year when investors were looking for companies that could win even in a weak, stay-at-home economy. Microsoft slipped 1.2%, and Johnson & Johnson fell 1.7%.

Stocks whose fortunes are more closely tied with the strength of the overall economy were doing better, led by airlines. American Airlines surged 28% after it said it plans to fly 55% of its normal U.S. schedule next month. That’s up from only 20% in April, as demand for travel gets closer to normal following the pandemic.

Other airlines rose in concert, with United Airlines up 15%, Delta Air Lines up 12% and Southwest Airlines up 6.2%. Airlines had been among the market’s hardest hit stocks earlier in the sell-off on worries that pandemic would mean no one wanting to fly for either business or vacation.

Charles Schwab rose 2.2% after it said antitrust regulators won’t block its acquisition of TD Ameritrade. The companies expect the deal to close in the second half of this year.

Many professional investors have been arguing that the stock market’s rally, which reached nearly 40% between late March and Wednesday, was overdone and that a pullback was likely coming. Stocks began surging following massive aid for the economy from Washington. More recently, they’ve climbed on optimism that the recession created by the reaction to the coronavirus outbreak could end relatively quickly as states and countries lift lockdown restrictions.

Critics said stocks were rising much more quickly than expectations for corporate profits and other measures of financial health. They also pointed to risks in rising U.S.-China tensions and the possibility of second waves of coronavirus infections.

Longer-term Treasury yields were rising Thursday. That area of the market had been one of the first to warn of the coming economic devastation from the coronavirus outbreak, and it’s been much more circumspect in recent weeks than the U.S. stock market.

The yield on the 10-year Treasury rose to 0.81% from 0.76% late Wednesday. It tends to move with investors’ expectations for inflation and the economy’s strength.

European stocks were weaker after the European Central Bank said it expects the region’s economy to shrink 8.7% this year due to the pandemic. It also announced it was nearly doubling its rescue program to help the economy.

The French CAC 40 was down 0.2%, Germany’s DAX lost 0.5% and the FTSE 100 in London dropped 0.6%.

Asian stocks were slightly stronger. Japan’s Nikkei 225 rose 0.4%, South Korea’s Kospi added 0.2% and the Hang Seng in Hong Kong picked up 0.2%.

A barrel of U.S. crude oil for delivery in July was little changed at $37.28 per barrel. Brent crude, the international standard, was also little changed at $39.75 per barrel.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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