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Wall Street Opens Lower as Virus Numbers, Jobless Weigh; Dow Down 120 Pts

Published 19/11/2020, 14:39
Updated 19/11/2020, 14:40
© Reuters.

© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened lower on Thursday, on course for their third straight daily loss after more gloomy numbers on the health front and the first rise in weekly jobless claims since September.

By 9:35 AM (1435 GMT), the Dow Jones Industrial Average was down 117 points, or 0.4%, at 29,322 points and has now lost all of the gains it made on Monday in response to Moderna 's (NASDAQ:MRNA) announcement that its experimental drug for treating Covid-19 was 94.5% effective.

The S&P 500 was likewise down 0.5% and the Nasdaq Composite was down 0.1%.

The move comes amid signs that institutional fund managers are turning bearish on the outlook for stocks, with Bank of America’s latest monthly survey showing that some are inclined to “sell the vaccine” after buying into story of accelerated development earlier in the year. In part that’s due to the awareness that even an effective vaccine will take time to be authorized, manufactured, distributed and administered.

Until such a time, the pressure on the economy from public health measures designed to stop the spread of the disease looks likely to stay. The Labor Department earlier reported that 742,000 people filed initial claims for jobless benefits last week, the first rise in six weeks, as the gradual tightening of restrictions on social activity hit the leisure and hospitality sectors in particular.

Fears of a bigger hit to the economy are gaining credence, with New York City deciding to close its public schools for the first time since spring. School closures, a widespread feature of policy responses to the first wave, have been shown to be particularly damaging to local economies, putting pressure on women in particular to drop out of the workforce, if only temporarily.

Among individual stocks moving early, Sonos (NASDAQ:SONO) stock rose 25% after a strong quarterly report that showed it profiting from people investing more in home audio systems due to their enforced confinement away from the office. The news also lifted Roku (NASDAQ:ROKU) stock 5.8%, on the perception that similar trends will have helped the maker of streaming devices.

That stay-at-home trend has been hard on department stores, however, and Macy’s (NYSE:M) stock fell 3.4% after it warned of low visibility about the upcoming holiday season. The company expects comparable sales to be down over 20% on the year in the current holiday quarter. The stock was vulnerable to some profit-taking after rising nearly 30% since Pfizer (NYSE:PFE) became the first company to announce it had a drug that worked against the coronavirus.

Another early mover was Nvidia (NASDAQ:NVDA) stock, which fell 2.0% after its latest quarterly update, released after the close on Thursday, raised concerns that its windfall gains from the virus - which has greatly boosted demand for data center and video game chips - may be levelling off. The chipmaker warned that sales of data center chips could fall in the current quarter from Q3 levels. 

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