Stock Market Today: Stocks Can't Muster Second Day of Gains
Early gains gave way to deeper losses Thursday as unemployment-benefits claims were higher than expected, and as a 'skinny' stimulus bill was snuffed.
Early broad-market gains at Thursday's open weakened as the day went on before flipping to solid losses, especially in Big Tech.
The Labor Department reported 884,000 new unemployment-benefits claims for the week ending Sept. 5. That was worse than estimates of 850,000, and continuing claims ticked higher.
"One week's worth of data does not make a trend and we hesitate to place too much weight on any one observation," writes Michael Gapen. Chief US Economist at Barclays Investment Bank, "however, the claims data this week suggest less momentum in labor market conditions in late August and early September.
"That said, the longer-term trends in initial and continuing claims remain positive and consistent with an economy that has maintained momentum well into the third quarter."
Also, Republicans' "skinny" COVID-19 relief bill failed to advance from the Senate, clipping the likelihood of any sort of stimulus before Election Day.
Other action in the stock market today:
- The Dow Jones Industrial Average closed 1.5% lower to 27,534.
- The S&P 500 finished down 1.8% to 3,339.
- The small-cap Russell 2000 lost slightly less, declining 1.2% to 1,507.
- Peloton (PTON) was up 3% in early after-hours action after the fitness-tech company reported its first quarterly profit as a publicly traded company, and said that its fiscal 2020 revenues and subscribers nearly doubled.
- Online pet-product retailer Chewy (CHWY) was up 2% in early after-hours trading after announcing 47% year-over-year sales growth for its second quarter, and a net loss of $32.8 million that was 60% thinner than last year.
Keep Your Eyes Peeled for Bargains
The stock market continues to grasp for direction as mixed signals abound.
In addition to slowing jobs data, Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, also points to declines in consumer spending and consumer confidence readings, but also offers up that COVID-19 data has been improving.
"The economic risks are also real, and we do see some slowing in the recovery so far. That will need to be watched," he says. "But, at the moment, the recovery continues, and there is a real possibility it will accelerate again if the medical risks remain constrained or, especially, if another federal income support program is passed.
"The risks are real, but so are the opportunities."
As we mentioned yesterday, those opportunities may include bargains on days like this –especially stocks already trading at value prices that are getting even cheaper. Dips are "double bonuses" for income stocks such as the Dividend Aristocrats – those S&P 500 stocks that have raised payouts for more than a quarter-century – as they provide improvements in both valuation and in yield.
At the moment, however, more than a dozen of these elite dividend growers are trading at attractive discounts, with some priced lower than their peers, lower than their historical averages or, in some cases, both. Read on to discover which Dividend Aristocrats look particularly cheap at present.