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Dow futures on Thursday fell nearly 500 points, or more than 1.3%, in a broad premarket decline as Japan declared a state of emergency in Tokyo for the upcoming Summer Olympics and as countries deal with a rebound in Covid cases due to variants. Futures tied to the S&P 500 and Nasdaq also dropped about 1.3% each.
- Premarket losses were led by companies that would benefit from a rapid economic comeback from the virus, including Carnival and Royal Caribbean as well as American Airlines and Delta Air Lines.
- Major cryptocurrencies, including bitcoin and ether, were also sharply lower.
Thursday's selling came one day after Wall Street's rally had resumed, with the S&P 500 and Nasdaq finishing at record high closes. The Dow Jones Industrial Average ended 0.3% shy of Friday's record close.
Investors rotated into the perceived safety of bonds Thursday, pushing the 10-year Treasury yield below 1.26% to the lowest since late February. Bond yields move inversely to prices.
- Despite the strengthening economy and hotter inflation, the 10-year yield continues to decline.
- It began July around 1.58%. It hit a then-14-month high of 1.78% in March.
- It began 2021 at less than 1%.
In another look at the recovery in the labor market, the government Thursday morning said initial jobless claims for last week totaled a worse-than-expected 373,000. That's up slightly from the upwardly revised pandemic-era low the previous week. The level of continuing claims decreased to 3.34 million, down 145,000 from the previous week's revised level.
Just two weeks before the Tokyo Olympics, Japan's prime minister on Thursday announced the state of emergency for the capital city due to rising Covid infections. The order goes into effect this coming Monday and through Aug. 22. That means the Olympics, opening on July 23 and running through Aug. 8, will be held entirely under emergency measures. While fans from abroad were banned months ago, Olympics officials had recently set venue limits at 50% capacity for local spectators. However, the state of emergency could force another change in the fan policy.
The global death toll from Covid exceeded 4 million late Wednesday as infections worldwide crossed 185 million, according to data compiled by Johns Hopkins University. In recent months, many countries are battling a surge in Covid infections due to the spread of the more transmissible delta variant, which first emerged in India. The delta strain now accounts for more than half of new Covid cases in the U.S. The World Health Organization has said that delta is the "fastest and fittest" variant yet, and health experts have warned it could undermine efforts to contain Covid even as vaccination campaigns are underway around the globe.
State attorneys general are again going after Google with an antitrust lawsuit, this time alleging the Alphabet unit abused its power over app developers through its Play Store on Android. The case marks the fourth antitrust lawsuit lodged against the company by U.S. government enforcers in the past year. By focusing on the Play Store, the latest lawsuit touches on an aspect of Google's business that is most similar to Apple's App Store. The App Store has become embattled in legal challenges and drawn lawmaker questions over whether it unfairly charges developers for payments through their apps by customers and whether it favors its own apps over those of its rivals.
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.