Stocks fell slightly on Thursday as the market’s rally this month loses steam amid disappointing U.S. unemployment data and rising coronavirus cases.
The Dow Jones Industrial Average traded 144 points lower, or 0.5%. The S&P 500 slid 0.4% and the Nasdaq Composite pulled back by 0.1%.
Travelers and UnitedHealth fell more than 1% each to lead the Dow lower. Utilities and financials were the worst-performing sectors in the S&P 500, falling 0.9% and 0.8%, respectively.
The Labor Department said that 742,000 Americans filed for unemployment benefits in the week of Nov. 14, topping a Dow Jones estimate of 710,000.
Meanwhile, the number of U.S. coronavirus cases keeps rising, dampening the upbeat sentiment seen in the market earlier in November. A CNBC analysis of Johns Hopkins University data found that the seven-day average of daily new U.S. coronavirus infections is now at 161,165, up 26% from last week. In total, more than 11.5 million coronavirus cases have been confirmed.
This recent uptick in Covid-19 cases has prompted some parts of the country to retake stricter measures to curb the virus spread. New York City Mayor Bill de Blasio ordered schools to close for in-person learning “out of an abundance of caution.”
“Negative COVID headlines/increased economic lockdowns (especially in NYC and LA County) are starting to offset vaccine optimism, and that’s weighing on stocks,” wrote Tom Essaye, founder of The Sevens Report. “We are now facing the biggest number of economic restrictions since the Spring, and that will weigh on economic growth and, potentially, earnings.”
Thursday’s losses were kept in check, however, after the release of preliminary data showed University of Oxford and AstraZeneca’s vaccine candidate triggered a similar immune response among all adults.
Wall Street was coming off a downbeat session, with the Dow and S&P 500 each falling more than 1% on Wednesday and the Nasdaq pulling back by 0.8%.
Despite Wednesday’s struggle, Wall Street has still seen a strong November, boosted in large part by positive news around potential coronavirus vaccines. The S&P 500 has gained 9.1% month to date, while the small-cap Russell 2000 hit an intraday record high on Wednesday.
The strength for small caps has been part of an outperformance for cyclical stocks in recent weeks after growth-oriented tech stock fueled much of the market’s rally from its March lows.
“You see the market really kind of wanting to move in one direction, and then I think the vaccine news was certainly a catalyst to accelerate that a little bit. So I wouldn’t be surprised to see that trade persist for some time,” Jeff Mills, chief investment officer at Bryn Mawr Trust, said about the rotation into cyclical names.
“That being said, I do think the leadership in the market could be volatile over the next couple of months because you’re going to be battling Covid case increases and incrementally better news relative to the vaccine,” Mills continued.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
