Before The Bell
Just minutes ago, the U.S. Labor Department reported that first-time jobless filings had risen to 853,000 in the latest seven-day period. That was well above last week's 716,000 and was the highest claims number since September 18th. High unemployment claims have been a major concern for Wall Street since March when COVID-19 struck with fury causing major lockdowns across the country. The number of filings, which had lessened markedly through the early fall, has ticked up again as coronavirus cases have surged anew, now exceeding 200,000 daily. And yesterday, deaths topped 3,000--a dismal record.
Also, in other news just out, the Consumer Price Index rose by 0.2% in November, twice the expected gain. As for the stock market this morning, indications now suggest a slightly softer open when trading resumes in a few minutes from now, with the latest data not seeming to have much of an impact on sentiment.
Meanwhile, looking back at yesterday's stock market, which had soared to record highs early in the trading day, it suddenly pulled back as the morning progressed. Once more, the good news on the vaccine front, where we are getting close to the start of mass distributions--a process that will take a number of months to conclude--was offset by the dramatic rise in COVID-19 infections and concerns about the uncertainty of negotiations on a stimulus package in Washington.
The morning market selloff then would get worse, with the technology sector, including Dow Jones Industrial Average components Apple Inc. (AAPL) and Microsoft (MSFT) leading the way lower in mid-afternoon trading. At the time, the Dow and the NASDAQ were off 175 points and 220 points, respectively. In economic news, wholesale inventories came in stronger than expected, and mortgage applications declined.
In other news yesterday, Treasury yields rose; the U.S. dollar was fairly stable following recent setbacks; crude oil prices were higher; and gold prices declined.
The equity market firmed into the close, especially on the Dow, which would end matters off by 105 points, while the S&P 500 would descend by 29 points. It was the NASDAQ, though, that would suffer the biggest hit, falling 244 points on the aforementioned slide in tech. In the aftermarket hours, the early read on the index futures was nominally positive last evening. As noted, sentiment now has shifted slightly.
- Harvey S. Katz, CFA
At the time of this article's writing, the author had positions in AAPL.
