US stocks retreated on Wednesday after three consecutive bullish sessions which pushed indices to new records. Still, the Nasdaq managed to close higher. Investor sentiment turned gloomy after the United States reported its first jobless claims, which showed that the economic recovery is lacking. The new foreclosure measures will continue to weigh on the labor market.
The S&P 500 fell 0.16%, the Dow lost 0.56%, while the Nasdaq rose 0.47%, as tech stocks were generally resistant to news related to the pandemic. Of the 11 main sectors of the S&P 500, 7 closed in the red, energy being the worst performing. The banking sector fell 0.7%.
US markets will be closed on Thursday for Thanksgiving Day. It may also explain the pullback, as investors took profits before the holidays.
The Labor Department said initial claims for unemployment benefits rose to 778,000 last week, exceeding expectations of 730,000 claims. The previous reading was also revised up from 6,000 to 748,000, having already increased more than expected. The data reflects the economic downturn amid the resurgence of COVID-19. The ministry confirmed that GDP grew by a record 33.1% in the three months ending in September, which is still a little lower than expected.
In the Sole Proprietorship News, Tesla issued two recalls of around 9,500 cars to fix the headliner that could fall off the steering wheel and to tighten any loose bolts. The largest recall covers more than 9,100 Model X cars produced in 2016. Despite the news, Tesla stock gained an additional 3.5% as investors wait for stock to enter the S&P 500 index next month. Meanwhile, documents submitted by electric vehicle maker Musk to authorities in Shanghai show the company plans to start manufacturing chargers in China from 2021.
Salesforce is in the process of acquiring Slack Technologies, which operates a business communications platform. Slack jumped almost 40% after the news. For Salesforce, this will be the biggest acquisition ever.
Amazon Web Services experienced an outage that required many businesses to notify their customers of product disruptions.
ViacomCBS has announced that it will sell publishing company Simon & Schuster to Bertelsmann’s Penguin Random House for around $ 2.2 billion.
Despite the decline in US stocks, Asian stocks were mostly bullish at the start of Thursday’s session.
At the time of writing, China’s Shanghai Composite is up 0.02%, while the Shenzhen component is down 0.66%, although it rebounds from the lows of the session.
Hong Kong’s Hang Seng Index is up 0.19%.
Japan’s Nikkei 225 closed up 0.96%. South Korea’s KOSPI is up 0.85%, after the Bank of Korea kept its key rate unchanged at 0.50, in line with expectations. The country is seeing an increase in coronavirus cases, with 583 new cases reported on Thursday.
In Australia, the ASX 200 closed down 0.70%.
European stocks will open higher as futures are currently bullish in all markets in the bloc.
In the commodities market, oil prices continue to rise after data from the United States Energy Information Administration (EIA) suggested a draw of 754,000 barrels of crude last week, while analysts expected an increase of 127,000 barrels. Brent and WTI both gained nearly 0.50%, trading at the highest levels since early March.
Gold is also somewhat bullish on Thursday, as investors turn to safe-haven stocks amid disappointing U.S. labor market data, surging COVID cases and falling stocks. The metal is up 0.13% to $ 1,807, still near the lowest level since July, after falling on vaccine news.
In foreign currencies, the US dollar fell due to weak US economic data. The USD index is down 0.12% to 91.855, close to the lowest level since April 2018. EUR / USD is up 0.21% to 1.1938, the highest since late August.
The British pound retreats against the euro, although it increases against a weakening greenback. European Commission President Ursula von der Leyen admitted progress had been made in Brexit negotiations, but said no deal was still possible and the EU was ready for it. She said the next few days would be decisive. Meanwhile, the UK’s Office of Fiscal Responsibility has said a no-deal Brexit could cost the UK 2% of its GDP, adding to the damage caused by the pandemic.
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