The Dow Jones Industrial Average fell for a second straight day on Thursday as investors weighed the rising number of coronavirus cases in the U.S. and around the world along with disappointing unemployment data.
The 30-stock Dow closed 39.51 points lower, or 0.2%, at 26,080.10. The Nasdaq Composite, meanwhile, climbed 0.3% to 9,943.05 for its fifth consecutive gain. The S&P 500 ended the session up 0.1% at 3,115.34.
Stocks struggled for direction throughout the session. At one point, the Dow was down 271 points and briefly turned positive. The S&P 500 also alternated between gains and losses for most of the day.
"Going forward, at these heightened levels, it's going to be much more difficult to get another significant leg higher unless forward-looking fundamentals get better," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, noting the market has already experienced sharp gains in a very short amount of time. "The earnings environment needs to meet that euphoria we've seen in the run-up after that bear market."
Facebook, Amazon and Netflix all closed slightly higher to lift the Nasdaq. Declines in Carnival and American Airlines kept a lid on the S&P 500's gains.
Initial U.S. weekly jobless claims rose more than expected last week, coming in at 1.508 million. Economists polled by Dow Jones expected a print of 1.3 million.
"While initial claims have now fallen for the 11th straight week after the late March spike, this past week saw the slowest pace of decline on a percentage basis since early April so we'll see if this is where it settles out for now," said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in a note.
Several states in the U.S. are experiencing a resurgence of infections. Arizona reported a record-high number of new confirmed cases, while Texas saw an 11% daily spike in hospitalizations for patients with Covid-19 on Wednesday. California, meanwhile, reported its largest-ever daily increase of coronavirus cases.
In China, the country's capital city has reportedly closed schools and canceled flights to contain the latest wave of coronavirus cases. However, a disease expert in China announced the latest outbreak of coronavirus cases in Beijing had been brought under control.
"We believe the market is pricing in quite a bit of good news and the rally is likely to take a breather in coming months as the recovery evolves," Scott Wren, Wells Fargo's senior global market strategist, said in a note. "We expect volatility in the coming months as we gauge how the reopenings are going and how consumer spending is progressing."
The major averages head into Friday's session with solid weekly gains. The Dow was up 1.9% through Thursday's close for the week while the S&P 500 has gained 2.4% in that time period. The Nasdaq has jumped more than 3% week to date.
"The fears regarding infection rates following the reopening of various States within the US and in other countries are understandable," said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note. "We do not doubt that progress will have a staccato feel to it in many localities, but we would be very surprised if another outbreak took hold that came anywhere close to what we saw take place at the start of 2020."
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