Stocks were lower Thursday in a choppy session as chances of further fiscal aid from Congress dwindled ahead of the presidential election in November, and as the number of Americans filing for first-time unemployment benefits remained elevated.
The Dow Jones Industrial Average fell 85 points, or 0.32%, to 26,678, the S&P 500 fell 0.29% and the tech-heavy Nasdaq slumped 0.41%. 0.75%.
The S&P 500 went negative for the year and fell into correction territory after dropping 10% from its September high.
The Labor Department reported Thursday that 870,000 Americans filed for first-time jobless benefits in the week ended Sept. 19, up from a revised 860,000 claims the week earlier. Economists polled by FactSet had been expecting claims of 850,000.
“While jobless claims under a million for four straight weeks could be considered a positive, we’re staring down a pretty stagnant labor market,” said Mike Loewengart, managing director of investment strategy at E*Trade. “This has been a slow roll to recovery and with no signs of additional stimulus from Washington, jobless Americans will likely continue to exist in limbo.
“Further, a shaky labor market translates into a skittish consumer, and in the face of a pandemic that seemingly won’t go away without a vaccine, the outlook for the economy certainly comes into question,” he added.
Economists at Goldman Sachs cut their fourth-quarter growth forecasts for the U.S. to 3% from 6% and said “further fiscal support will likely have to wait until 2021.”
“The Fed can only lend money, not spend money. Only Congress can provide funds to the still high number of unemployed workers, and (Fed Chairman Jerome) Powell seems to be more and more communicating a belief by the Fed that Congress is falling down on the job,” said C.J. MacDonald, client portfolio manager at GuideStone Capital Management.
“A new fiscal stimulus bill looks to be dead in the water. That fact, and an uncertain and contentious election season now at full boil, may cause volatility and downside in the financial markets to continue in the short-term,” MacDonald added.