Stocks traded largely lower on Thursday as a spate of Big Tech earnings caused large movements in some of Silicon Valley’s largest names — and disappointing labor market news had Wall Street in a sour mood.
Weekly initial jobless claims rose to 1.42 million last week, the first week-over-week rise in almost four months, as a resurgence in virus cases in the U.S. caused some states to renew restrictions on bars and restaurants.
Economists had expected claims to drop slightly to 1.29 million from the 1.31 million seen the week before.
That news wasn’t received well by investors, and eight of the 11 stock market sectors fell on Thursday, led by information technology’s 2.6% decline.
A few Big Tech names that have been going gangbusters in 2020 ended the day as prominent laggards. The Dow finished down 353 points, or 1.3%, to close at 26,652. The Nasdaq lost 2.3% on the day.
Tesla earnings and Tesla litigation. Electric vehicles leader Tesla (ticker: TSLA), which also happens to have been one of most surprisingly buoyant stocks in 2020 — shares are up more than 250% this calendar year — saw shares fall 5% on Thursday.
The company reported earnings that were widely lauded by Wall Street, as it delivered an unexpected second-quarter profit and beat consensus revenue expectations. The four consecutive quarters of profits make Tesla eligible for inclusion in the S&P 500, which would force large index-tracking funds to buy the stock, and encourage money managers seeking to track the index to add it as well.
And, because there’s never enough news regarding Tesla, the company is suing a rival in the electric vehicle industry, the startup Rivian, for poaching employees and stealing trade secrets.
Microsoft slips after impressive reports. Microsoft ( MSFT), which at a market valuation around $1.5 trillion routinely trades places with Apple ( AAPL) and Amazon ( AMZN) as the most valuable company in the world, reported earnings Wednesday that topped expectations.
Still, shares lost 4.3% on Thursday as the stock retreated from record highs it set this week, despite several analysts raising their price targets on the stock following the strong quarter. Just as a rising tide lifts all boats, an ebbing tide brings them all closer to earth. That seemed to be the phenomenon at play with Microsoft Thursday, with the stock succumbing to sector-wide selling on the heels of poor jobs figures.
More from U.S. News