US stocks slide as weekly jobless claims post surprise jump

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NYSE TraderLucas Jackson/Reuters

  • US stocks slid on Thursday as weekly jobless claims posted a surprise jump, climbing back above 1 million after two straight periods of decline.
  • Investors also weighed the stalled talks between Democrats and Republicans on the next coronavirus stimulus package.
  • The Federal Reserve on Wednesday released minutes from its latest meeting, showing that the group thinks the recovery from the pandemic recession requires more government support.
  • Read more on Business Insider.

US stocks fell on Thursday as weekly jobless claims posted a surprise increase, signaling a slowdown in the economic recovery.

New US weekly jobless claims totaled 1.1 million in the week that ended on Saturday, the Labor Department reported on Thursday. That came in well above the consensus economist estimate of 920,000 compiled by Bloomberg and snapped a two-week streak of declines.

"This is a temporary setback, as COVID-19 levels are still high but dropping, and re-openings continue, though at a slower pace given COVID-19's surge in July," said Robert Frick, a corporate economist at Navy Federal Credit Union. "It underscores the economy is fighting in the trenches with COVID-19."

Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Thursday:

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The labor-market report came as investors await signs that the next round of coronavirus aid will move forward in Washington; Democrats and Republicans remain deadlocked.

Thursday's declines followed a late-day sell-off on Wednesday triggered by Federal Reserve minutes showing that the group thinks the recovery from the pandemic recession requires more government support.

"The fact that the Fed appeared reluctant to step up further stimulus efforts imminently, disappointed the bulls who were expecting further clues on the trajectory of monetary policy," said Hussein Sayed, the chief market strategist at FXTM.

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Earnings season continued. Shares of Nvidia slumped — even after reporting blowout earnings that beat expectations — as the company signaled that its data-center business may see slower growth. Its competitor Intel's stock gained after it announced an accelerated program to buy back $10 billion of its own stock.

Oil fell after OPEC and the Fed said the recovery from the pandemic recession was taking longer than anticipated. West Texas Intermediate crude slipped as much as 2.3%, to $41.95 per barrel. Brent crude, the international benchmark, fell 2.4%, to $44.30 per barrel, at intraday lows.

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