Thursday’s Stock Market Open: US Equities Drop As Another 1.3 Million File Jobless Claims, China Sells Off

Updated: 12:05 p.m. EDT:

U.S. stocks remained in the red as of Thursday noon.

The Dow Jones Industrial Average dropped 123.88 points to 26,746.22, while the S&P 500 fell 20.52 points to 3,206.04 and the Nasdaq Composite Index tumbled 129.77 points to 10,420.73.

In Europe markets finished lower, as Britain’s FTSE-100 slipped 0.67%, while France’s CAC-40 dropped 0.46% and Germany’s DAX fell 0.43%.

Original story:

U.S. stocks fell on Thursday following a sell-off in Mainland China as traders also mulled another big jobless claims report.

The Dow Jones Industrial Average dropped 155.52 points to 26,714.58, while the S&P 500 fell 18.64 points to 3,207.92 and the Nasdaq Composite Index tumbled 91.65 points to 10,458.84.

About 1.3 million Americans filed for unemployment benefits last week, marking 16 consecutive weeks of initial jobless claims surpassing 1 million.

Heather Long of the Washington Post tweeted: “[Four] months into this crisis and the U.S. is still hemorrhaging jobs… The level of jobless claims is stalling -- and that's a very worrying sign.”

U.S. retail sales rose by 7.5% in June, well above the expected 5% increase.

Bank of America (BAC) saw its second quarter profit drop by 52%, while Morgan Stanley (MS) delivered outstanding results.

Mainland Chinese stocks endured a big sell-off, with the Shanghai composite index plunging more than 4%, despite the fact that China’s gross domestic product grew 3.2% in the second quarter.

“The problem is, this is still uneven,” said Helen Qiao, chief greater China economist at Bank of America Corp., referring to China GDP. “It is hard to see how China can remain on a firm footing at a time when the rest of the world is still coping with a very deep recession.”

The European Central Bank kept its interest rates and emergency coronavirus stimulus program unchanged on Thursday.

“We are not out of the woods yet and are still far away from returning to pre-Covid-19 economic levels,” said Nate Fischer, chief investment strategist at Strategic Wealth Partners. “The market is in need of a health-care solution, as the economy was forced to shut down for a health-care issue. So far, we’ve had fiscal and monetary assistance to this problem. Until a real medical remedy is found, the market will remain volatile.”

Overnight in Asia markets finished lower, as China’s Shanghai Composite index plunged 4.5%; Japan’s Nikkei-225 slipped 0.76%; and Hong Kong’s Hang Seng exchange dropped 2%.

In Europe markets traded lower, as Britain’s FTSE-100 slipped 0.28%, while France’s CAC-40 dropped 0.38% and Germany’s DAX fell 0.35%.

Crude oil futures dropped 1.17% at $40.72 per barrel, Brent crude edged down 0.75% at $43.46. Gold futures inched down 0.38%.