Shares fell Thursday, indicating that technology stocks will lead to declines for the major indices as investors waited for gains and assessed new data on the US labor market.
The S&P 500 fell 0.8%, while the Dow Jones Industrial Average fell 0.7%. The tech-heavy Nasdaq Composite continued its decline from Wednesday, falling 1.1%.
The number of unemployment claims – a proxy for layoffs – stayed above the pre-coronavirus pandemic peak of 695,000. The number of new claims for unemployment benefits rose to 861,000 last week, halting a downward trend that had pointed to an improving labor market. Economists had expected the claims to diminish.
Stocks have taken a breather in recent sessions after moving higher for much of 2021. Some investors have been caught off guard by a rapid rise in government bond yields, which seemed to beat technology stocks that have benefited from years of low interest rates. Money managers are also concerned about high valuations.
Still, many investors remain optimistic about the outlook for equities. They point to the likely arrival of more fiscal stimulus as a factor that will boost economic growth and profits in 2021, in addition to the reopening of sectors badly affected by the pandemic.