By Mark DeCambre and Sunny Oh
U.S. stocks finished well off session lows but ended with losses for a third day on Thursday, as rising coronavirus cases, especially in Europe, resulted in new restrictions on businesses and travel.
Investor sentiment also took a hit following a rise in weekly U.S. jobless claims and a lack of progress in Congress on another fiscal stimulus bill which is now unlikely until after the November elections.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.13% fell 19.80 points, or 0.1%, to 28,494.2, but well off its intraday nadir of 28,181.54; the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.24% was down 5.33 points to end at 3,483.34, a drop of 0.2%, while the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.92% slumped by 0.5%, a fall of 54.86 points to 11,713.8.
The small-cap Russell 2000 /zigman2/quotes/210598147/delayed RUT +0.56% , however, gained 1.1% to end at 1,638.88.
On Wednesday , the Dow slumped 165.81 points, 0.6%, to finish at 28,514.00, while the S&P 500 index fell 23.26 points, 0.7%, to end at 3,488.67. The Nasdaq dropped 95.17 points, or 0.8%, to close at 11,768.73.
Investors wrestled with concerns about rising numbers of COVID-19 cases and fading hopes for any further fiscal stimulus from Congress before the November U.S. elections.
“It was only a matter of time before investors are no longer able to ignore the sharp increase in new COVID-19 cases and new restrictions being introduced throughout Europe,” said Milan Cutkovic, a market analyst at Axi, in a note.
France joined the U.K. in imposing fresh social restrictions, including declaring a state of emergency and a nightly curfew in a number of metropolitan regions across the country. The U.K. has been tightening social restrictions also to help limit the spread of the outbreak.
Investors have also been discouraged by a lack of progress in negotiations between House Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin on an additional round of fiscal stimulus to help stem economic hardship from the COVID-19 pandemic.
While Mnuchin and Pelosi talks continue, Senate Majority Leader Mitch McConnell reiterated Thursday he won’t put a large fiscal stimulus package on the Senate floor, leaving a wide and public gap between between himself and President Donald Trump on the issue.
Meanwhile, investors have been poring over corporate earnings, with the last of the major Wall Street banks, Morgan Stanley /zigman2/quotes/209104354/composite MS +0.57% posting a third-quarter profit of $2.7 billion, or $1.66 per share, besting consensus estimates for $1.28 by Refinitiv and producing revenue of $11.7 billion that were 16% better than a year ago. Morgan Stanley’s report comes after Bank of America /zigman2/quotes/200894270/composite BAC -0.14% , JPMorgan Chase & Co. /zigman2/quotes/205971034/composite JPM -0.66% , Citigroup /zigman2/quotes/207741460/composite C -0.68% and Wells Fargo & Co. /zigman2/quotes/203790192/composite WFC -0.45% , all reported mixed results.
The Nasdaq index was also depressed by a Goldman Sachs note cutting its recommendation on technology stocks to neutral, saying likely policy shifts and slowing economic growth may temporarily cap the outperformance of the sector.
In economic reports, U.S. weekly jobless claims data, a closely watched high-frequency date point in the pandemic era, climbed 53,000 to 898,000, representing the highest level since Aug. 22.
“The labor market did a good job recouping more than half of the job losses from March. But what the continued elevation of jobless claims and other labor market data tells us is that recouping that second half is going to be a lot harder,” said Michael Arone, chief investment strategist at State Street Global Advisors, in an interview.
In other data, the Philadelphia Federal Reserve’s factory index jumped to 32.3 in October well above consensus forecast of 13.5. The index hit 15 in September. Separately, the Empire State manufacturing index fell to 10.5 in October from 17 in prior month.
Later in the day, Minneapolis Federal Reserve President Neel Kaskari, will speak about the U.S. economic outlook to the New York University Stern School at 5 p.m. Eastern.
Finally, both President Donald Trump and Joe Biden, Democratic contender for the presidency in November’s elections, will both hold separate “town hall” sessions on competing television channels at 8 p.m. Eastern Thursday night, after the scheduled second debate was canceled.
The yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -4.54% note was up around a single basis point to 0.73%, after the stock market’s midday reversal helped to roll back earlier bond-market gains. Yields and bond prices move in opposite directions.
Gold prices /zigman2/quotes/201432642/composite GOLD -0.22% tacked on $1.60, or 0.1%, to settle at $1,908.90 an ounce . Oil futures tanked, pushing the U.S. benchmark down 0.2% to settle at $40.96 a barrel on the New York Mercantile Exchange.
The greenback was 0.5% higher, based on the ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.21% .