Wall Street Set to Dip After Jump in Weekly Jobless Claims | Investing News

(Reuters) – Wall Street’s main indexes were set to open lower on Thursday as a jump in weekly jobless claims suggested a stalling recovery in the labor market, while negotiations over fresh economic stimulus dragged on.

The Labor Department’s report showed initial claims for state unemployment benefits totaled a seasonally adjusted 853,000 for the week ended Dec. 5, compared with 716,000 in the prior week. Economists polled by Reuters had forecast 725,000 applications in the latest week.

“The trend in jobless claims hasn’t been good and that makes sense when we look at the path of the virus and the increasing caseloads and hospitalization rates,” said Art Hogan, chief market strategist at National Securities in New York.

The faltering labor market recovery and the recent surge in COVID-19 infections has piled pressure on policymakers to come up with another rescue package, as most of the financial aid from the government has dried up.

U.S. lawmakers approved a stopgap government funding bill on Wednesday that would provide more time for negotiations, but an agreement has remained elusive due to disagreements over aid to state and local governments and business liability protections.

“Any good news on the stimulus could usurp everything else and get us back to focusing on the potential for vaccines and the economic energy that will get released. But for now, we are held hostage to the gridlock in Washington,” Hogan added.

Wall Street’s main indexes have scaled record highs in the past few weeks as investors bet on a vaccine-linked economic recovery and shrugged off glum macroeconomic data showing the near-term impact from sweeping coronavirus-induced lockdowns.

Pfizer Inc’s shares rose 0.4% in premarket trading, ahead of a meeting of outside advisers to the U.S. Food and Drug Administration (FDA) later in the day, to decide whether to recommend that the agency authorize its COVID-19 vaccine for emergency use.

Some officials said vaccinations could begin as soon as this weekend if the FDA consented.

Home rental firm Airbnb Inc said on Wednesday it sold shares in its initial public offering at $68 apiece to raise around $3.5 billion.

Airbnb’s IPO is the biggest by a U.S. operating company in 2020 and its shares are scheduled to start trading on Nasdaq on Thursday.

At 08:34 a.m. ET, Dow E-minis were down 29 points, or 0.1%, and S&P 500 E-minis were down 8.75 points, or 0.24%.

Nasdaq 100 E-minis were down 61 points, or 0.49%, as Facebook Inc and Tesla Inc fell 0.6% and 5.0% respectively, extending declines from the previous session.

Facebook could be forced to sell its prized assets WhatsApp and Instagram after the Federal Trade Commission and nearly every U.S. state filed lawsuits against it.

In other market-related news, S&P Dow Jones Indices said it would remove 10 Chinese companies from its equities indices following a Trump administration order to prohibit purchases by U.S. investors of certain Chinese securities.

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta)

Copyright 2020 Thomson Reuters.

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