860,000 Newly Unemployed Last Week; Big Tech Stumbles

All three major U.S. indices finished lower on Thursday, led by the high-flying Nasdaq, which lost almost 1.3%.

Markets have been volatile in recent weeks, and the most recent announcement from the Federal Open Market Committee on Wednesday seems to have spooked investors further. The Federal Reserve announced intentions to keep rates low through 2023 as it braced the public for what it expects will be a long and uneasy recovery in the labor market.

That reality was underscored by Thursday’s top-line economic numbers, which showed another 860,000 people filed initial jobless claims. Although down from 893,000 the week before, it’s still a harrowing figure, and higher than the 830,000 economists expected.

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The Dow Jones Industrial Average lost 130 points, or nearly 0.5%, to finish at 27,901.

Not playing around. Shares of the game-focused restaurant chain Dave & Buster’s Entertainment (ticker: PLAY) took a 26% hit on Thursday as reports of PLAY’s dire situation hit the wires. Fresh off a quarter in which revenue plunged 85% to $50.8 million from $344.6 million a year ago.

Dave & Buster’s will be laying off more than 1,300 workers and renegotiating debt terms with its creditors. If it can’t renegotiate those terms, the company may end up in bankruptcy. It may be in lenders’ best interest to work something realistic out with D&B’s instead of fighting for scraps in bankruptcy court, but the restaurant’s business model is so dependent on a return to normalcy that its outlook is murky either way.

Tech tanks. If you can say one thing about 2020’s stock market rally off of March lows (besides its clear disconnection from the larger economy), it’s that it’s been extremely concentrated. Mega-cap tech stocks, which exert a huge influence on the major indices, have soared this year.

Now some of those same names are leading a pullback, with shares of Amazon.com ( AMZN), Facebook ( FB) and Tesla ( TSLA) — three companies collectively worth around $2.6 trillion — all losing between 2.2% and 4.2% on Thursday.

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860,000 Newly Unemployed Last Week; Big Tech Stumbles originally appeared on usnews.com

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