Stocks are down for the third day in a row as coronavirus cases surging abroad push global markets down and new data released on jobless claims indicate the already-sluggish economic recovery could be slowing down even more, as the prospects of economic stimulus continue to dampen..
As of 9:45 a.m. EDT, the Dow Jones Industrial Average and the S&P 500 were down about .9%, while the tech-heavy Nasdaq had fallen 1%.
Jobless claims increased for the first time since mid-August, with the Department of Labor saying on Thursday morning that an estimated 898,000 Americans filed for new unemployment claims last week, up 53,000 from the prior week.
Meanwhile, headwinds from a push to commission-free trading and historically low interest rates didn’t stop brokerage Charles Schwab from reporting an earnings beat on Thursday morning.
Morgan Stanley also posted a beat on Thursday, nabbing $2.7 billion in third-quarter profits, compared to $2.2 billion in the same period last year.
Global markets are also struggling: As of market open, the United Kingdom’s FTSE 100 was down 2.2%, France’s CAC 40 had fallen 2.5% (after a renewed pandemic curfew in Paris), and Japan’s Nikkei 225 ended Thursday down .5%.
Negotiations between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin for another round of coronavirus relief are set to continue on Thursday, with Mnuchin telling CNBC’s Squawk Box that he won’t let the disagreement over the language around testing “stand in the way.”
Dwindling hope on the stimulus front has stifled markets this week as the first week of third-quarter earnings season reveals mixed results from big banks and airlines. JPMorgan Chase and Citigroup kicked off the season on Tuesday with a better-than-expected profit of $9.4 billion and $3.2 billion, respectively, but on Wednesday, Wells Fargo and Bank of America failed to impress investors, and stocks finished the day down for the second day in a row. Ally Financial, State Street and Bank of New York Mellon are among firms slated to report on Friday.
“The market’s biggest worry is Washington as it relates to uncertainty surrounding fiscal stimulus,” Roderick von Lipsey, a managing director at UBS Private Wealth Management, said on Wednesday. “With the political tug-of-war over a stimulus package, the markets are waiting to see how much and when.”