Wall St. reverses course as tech tumbles; perceives sharpest plunge since June

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Wall St. reverses course as tech tumbles; perceives sharpest plunge since June

On Thursday, Wall St.’s all three key indices had wrapped up the day sharply lower with tech stocks shrugging off almost all of their recent gains as investors appeared to have ditched out the high-flying tech stocks of Nasdaq and S&P following reveal of a historically high jobless claims data.

In point of fact, Thursday’s tottering in the Wall Street was largely goaded by a bundle of baleful economic data as both initial and continuing jobless claims had still been hovering above a record trench, suggesting a menacing slowdown in labour market recovery as forecasted in July FOMC minutes.

Besides, analysts’ repeated warnings of a widespread sluggishness in economic recovery from the pandemic-led slumps appeared to have watered the investors’ ears and had prompted them to coffer profits from a record-setting Wall St.

rally, which in effect had also led to a tormenting tech sell-off slamming the markets.

S&P, Nasdaq retreat record highs

Citing statistics, on Thursday’s Wall St. wrap up, trade-sensitive Dow tottered as much as 2.78 per cent to 28,292.73, while S&P 500 had shrugged off 3.51 per cent to 3,455.06 and the tech-heavy Nasdaq dived 4.96 per cent to 11,458.10.

Both S&P 500 and Nasdaq had retreated from their all-time closing highs. In factuality, against all of the odds, money markets in the United States had witnessed a maverick turnaround from their March-lows, mostly driven by a slew of monetary and fiscal support from the US Fed, nonetheless, as the Capitol Hill had been failing to reach an accord over a second round of pandemic stimulus, labour markets started off slowing down and re-hiring seemed to be stalling, impacts of which had been reflected in Thursday’s Wall Street.

Besides, US Labour Department data released on Thursday that said the initial jobless claims fell to their lowest level since the onset of the pandemic, could have led to a meteoric rise in the Wall St.

in normal circumstances. However, in contrast to a reading of at least 13 million laid-off Americans applying for continuing benefits, a decline in initial jobless claim by 130,000 to 881,000 last week had suggested that the current pace of re-hiring in US businesses would require years to reach a pre-pandemic level for the US Labour market.

Meanwhile, underscoring a tepid reaction from the US investors less than 60 days away from the November 3, 2020 US Presidential election, a co-chief investment strategist at John Hancock Investment Management, Emily Roland said on the day’s Wall St.

closing bell, “Think about the mounting number of risks the market has been shrugging off over the last couple of months here. We’re 60 days away from the election. That may be an area where investors are getting a bit spooked.

Looking at the data today, the market has had the ability to power higher and hasn’t paid any attention to a macro environment which, yes, is improving which is encouraging, but the economy remains fragile here.