Stocks traded lower on Thursday as Microsoft led shares of major tech companies lower and traders pored through disappointing unemployment data.
The Dow Jones Industrials dropped 100.06 points to 26,905.78, after three straight days of gains.
The S&P 500 docked 0.75 points to 3,275.27, hoping to recover and prolong a four-day winning streak.
The NASDAQ lost 19.02 points to 10,687.11.
Microsoft fell nearly 2% despite reporting better-than-expected earnings for the previous quarter. Though the company’s results were largely positive, Microsoft said its transactional license purchasing continued to slow and that subsidiary LinkedIn was negatively impacted by the weak job market.
Other tech giants were also under pressure. Amazon dropped more than 1.5%. Apple traded 1.3% lower. Netflix slid 0.9%. Tesla, meanwhile, gave back most of its earlier gains despite reporting earnings that blew past analyst expectations. Elon Musk’s automaker also said it’s set “for a successful second half” and reiterated its goal of delivering 500,000 vehicles this year.
U.S. weekly jobless claims came in at 1.416 million for last week, marking the 18th straight week in which initial claims totaled more than one million. Economists expected another 1.3 million workers to have filed initial claims for state unemployment benefits, according to Dow Jones.
This stalling in the labour market comes as lawmakers work on an additional stimulus package for those impacted by the coronavirus pandemic.
On Wednesday, sources told the media that Republicans were considering extending a $600-per-week unemployment benefit at a reduced rate of $100 per week. On Thursday, Treasury Secretary Steven Mnuchin said an extension in unemployment benefits will be based on “approximately 70% wage replacement.”
Wall Street’s attention was also on earnings announcements from several U.S. companies, but especially Microsoft and carmaker Tesla.
Despite better-than-expected figures, software giant Microsoft shares fell 2%. Though the company’s results were largely positive, Microsoft said its transactional license purchasing continued to slow and that subsidiary LinkedIn was negatively impacted by the weak job market.
Tesla, meanwhile, blew past analyst expectations and posted its fourth consecutive quarter of profit, opening the door for the company’s inclusion in the S&P 500. Excluding one-time charges, Tesla’s second-quarter earnings per share of $2.18 were well above the three cents per share expected by analysts.
Prices for the 10-Year Treasury gained ground, weighing yields to 0.58% from Wednesday’s 0.60%. Treasury prices and yields move in opposite directions.
Oil prices slid 25 cents to $41.65 U.S. a barrel.
Gold prices brightened $27.00 to $1,892.10 U.S. an ounce.