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U.S. Stocks Wobble as Economic Picture Dims

The S&P 500 and Dow Jones Industrial Average drifted lower Thursday, pulled down by broad losses that offset a rally in the energy sector.

Markets slipped to start the trading day. But a jump in oil prices helped propel shares of energy producers higher, allowing major indexes to finish well off their lows.

The Dow Jones Industrial Average finished down 69.55 points, or 0.2%, at 29999.26 after falling nearly 200 points earlier. The S&P 500 lost 4.72 points, or 0.1%, to 3668.10. The Nasdaq Composite rose 66.86 points, or 0.5%, to 12405.81.

In recent weeks, analysts and money managers have been hoping a fragile economic picture will ramp up pressure on Congress to pass a fresh fiscal-stimulus spending bill to support businesses and households. Labor Department data Thursday showed unemployment claims rose sharply last week—a worrying sign for the labor market.

Lawmakers have broadly agreed with the White House that the aid package should total around $900 billion, but key points of contention remain.

“Concerns persist about the potential near-term impact of fiscal relief measures to combat the spike in new virus cases in the U.S. and abroad,” said Richard Flynn, a managing director at Charles Schwab. “The question that is now being asked is, will any further disappointing jobs data add urgency for an additional stimulus package to pass Congress or, will we see negotiations spillover into the first part of 2021.”

The coronavirus has continued to spread at a rapid pace, with the U.S. death toll hitting a new single-day record at 3,100.

If “the virus becomes really bad [and] the economic picture starts to worsen at the same time, you could easily see how this picture unfolds,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “To prevent this, it is very critical that policy makers get this done.”

Energy shares led gains in the S&P 500, with

Exxon Mobil


XOM 2.83%

rising $1.21, or 2.8%, to $44.01 and

Chevron


CVX 3.22%

adding $2.91, or 3.2%, to $93.35. Meanwhile, U.S. crude oil climbed 2.8% to $46.78 a barrel, snapping a three-session streak of losses and ending at its highest level since March.

Oil prices had taken a hit on weakened demand this year, but more recently recouped some of their losses as investors turned more hopeful about vaccines helping ease the fallout from the pandemic.

Airbnb


ABNB 112.81%

shares soared $144.71, or 113%, to $144.71 in their market debut, underscoring strong investor demand for new stock listings despite a tough economic environment.

Facebook


FB -0.29%

dropped 80 cents, or 0.3%, to $277.12, paring initial losses after the Federal Trade Commission and a group of 48 attorneys general filed antitrust lawsuits against the company Wednesday.

Applications for jobless benefits rose sharply to 853,000 last week, more than economists had forecast.



Photo:

Rogelio V. Solis/Associated Press

Overseas, the pan-continental Stoxx Europe 600 slipped 0.4%, weighed down by shares of banks and auto makers.

The European Central Bank on Thursday expanded a key bond-buying program by €500 billion to €1.85 trillion and extended the program to at least the end of March 2022. It also increased support to the banking system through a series of ramped-up measures to boost liquidity and extended a key program until June 2022.

The pandemic and containment measures had a more severe impact on the economy than previously anticipated, said European Central Bank President

Christine Lagarde

in a press conference. Ms. Lagarde added that she didn’t expect the economy to function normally until the end of next year.

“The ECB is essentially saying there is no end in sight for the bond-buying program,” said

Sebastien Galy,

a macro strategist at

Nordea Asset Management.

“It is an encouraging message.”

Still, the measures for the banking system were less than some analysts had expected, he said. The Stoxx Europe 600 banks sector slid 2.1%.

Separately, continuing negotiations on a post-Brexit trade deal between the U.K. and the European Union also weighed on sentiment in the region, analysts said. The European Commission said Thursday it is preparing contingency measures for a no-deal scenario, which includes rules for aviation and road travel.

“We still think an agreement will be reached in the 11th hour, but we are also preparing for a breakdown of talks,” said Steve Donzé, a macro strategist and fund manager at Pictet Asset Management. “A hard and dirty Brexit would suppress some of the recovery.”

In Asia, most major benchmarks ended the day lower. Japan’s Nikkei 225 slipped 0.2% and Hong Kong’s Hang Seng Index fell 0.4%. The Shanghai Composite Index was relatively flat.

SoftBank

shares rose nearly 11% in Asian trading, climbing to their highest level in over 20 years. The tech investor owns nearly a quarter of

DoorDash,


DASH -1.85%

the food-delivery company that saw its shares jump 86% in its public-market debut Wednesday.

Write to Anna Hirtenstein at [email protected] and Akane Otani at [email protected]

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