- US equities slid on Thursday, even as economic data pointed to a stronger-than-expected pace of recovery.
- The US economy grew at a record 33.1% annualized rate in the third quarter, the Commerce Department said Thursday. The reading exceeded the 32% estimate from economists surveyed by Bloomberg.
- Weekly jobless claims fell to 751,000 in the week that ended on Saturday, according to the Labor Department. The reading exceeded the median economist estimate of 770,000.
- Tech stocks outperformed ahead of earnings reports from Apple, Amazon, Facebook, and Alphabet after the close.
- Watch major indexes update live here.
US stocks slid on Thursday, even as economic data detailing the nation’s recovery exceeded expectations.
The US economy grew at a record 33.1% annualized rate in the third quarter, the Commerce Department announced Thursday. The reading came in just above the 32% economist estimate and is roughly double the next-biggest GDP jump in history.
While the leap initially seems to offset the second quarter’s 31.4% contraction, it doesn’t bring output back to pre-pandemic levels. Third-quarter growth would’ve needed to hit roughly 46% to completely balance out the virus-induced slump.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Thursday:
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“If the provisional figure is correct, the US economy has now recovered to around 10% below its level in the first quarter, before the onset of the pandemic in the US,” Cailin Birch, global economist at The Economist Intelligence Unit, said in an emailed statement,
Weekly jobless claims data also exceeded economists’ forecasts. Filings for unemployment benefits fell to an unadjusted 751,000 for the week ended on Saturday, according to the Labor Department. Economists surveyed by Bloomberg expected claims to slide to 770,000.
Continuing claims, which track the aggregate total of Americans receiving unemployment benefits, fell to 7.8 million for the week that ended on October 17. That reading was roughly in line with economists’ expectations.
The Thursday claims report suggests the labor market’s recovery is moving forward after stalling earlier in the month. Still, “good news continues to be tempered” by the rising number of Americans who have exhausted regular benefits, Nancy Vanden Houten, lead US economist at Oxford Economics, said in a note, adding the total is “evidence of more lasting scarring in the labor market.”
The mixed open follows stocks’ worst day since June. The S&P 500 sank 3.5% on Wednesday as surging COVID-19 cases prompted Germany and France to reinstate partial lockdowns. With cases in the US trending higher, rising odds of another economic shutdown cut into investor sentiments.
If the quarterly GDP reading and jobless claims weren’t enough to digest, Apple, Amazon, Facebook, and Alphabet are set to report earnings after the market closes. Better-than-expected results could help major indexes erase some of the week’s losses on Friday.
Tech stocks led the Nasdaq to outperform after the open, while the Dow eked minor gains. The latter index tumbled through the week as financial and industrial stocks faced outsized selling.
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Bitcoin hovered around $13,000 after breaking above $13,300 earlier in the morning. The cryptocurrency’s rally has slowed after breaking through the psychological level.
Spot gold fell as much as 0.3% to $1,871.17 per ounce, nearing one-month lows. The US dollar gained against a basket of other currencies and Treasury yields edged higher.
Oil sank to a four-month low as new lockdowns in Europe damaged recovery hopes. West Texas Intermediate crude fell as much as 5.4%, to $35.36 per barrel. Brent crude, oil’s international benchmark, fell 5%, to $37.12 per barrel, at intraday lows.
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