Big tech leads decline as job losses top 51M

Investors rotated out of big tech

U.S. equity markets slid Thursday, led by large-cap tech stocks, as nationwide job losses during coronavirus lockdowns topped 51 million. Additionally, a basket of earnings reports showed how the pandemic has eroded Corporate America's bottom line.

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The Nasdaq fell 0.73 percent as investors sold Apple, Microsoft and Amazon which have been hovering near record levels.

TickerSecurityLastChangeChange %
I:COMPNASDAQ COMPOSITE INDEX11010.982553-97.09-0.87%
AAPLAPPLE INC.444.45-10.34-2.27%
MSFTMICROSOFT CORP.212.48-3.87-1.79%
AMZNAMAZON.COM INC.3,167.46-57.54-1.78%

Meanwhile the Dow Jones Industrial Average fell 135 points, or 0.50 percent. and the S&P 500 lost 0.34 percent.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27433.48+46.50+0.17%
SP500S&P 5003351.28+2.12+0.06%

On the economic front, initial jobless claims for the week ended July 10 totaled 1.3 million, slightly higher than the 1.25 million that were expected. More than 51 million Americans have filed for unemployment since COVID-19 shutdowns began in mid-March.

Still, continuing claims fell by 422,000 to about 17.3 million, suggesting many of those who lost their jobs were rehired.

Another bright spot, retail sales jumped 7.5 percent month-over-month in June, outpacing the 5 percent that analysts surveyed by Refinitiv were expecting. Last month’s reading was revised up to a gain of 18.2 percent from 17.7 percent.

In stocks, Bank of America beat on both the top and bottom lines and earmarked $4 billion for growing loan defaults amid the COVID-19 pandemic.

Morgan Stanley's profit spiked 45 percent as uncertainty caused by COVID-19 whipped up market volatility and made for an ideal trading environment.

Johnson & Johnson’s quarterly profit plunged 35 percent from a year ago as demand for beauty products and elective surgeries slowed due to COVID-19.

TickerSecurityLastChangeChange %
BACBANK OF AMERICA CORP.26.11+0.64+2.51%
MSMORGAN STANLEY50.35+0.90+1.82%
JNJJOHNSON & JOHNSON148.60+1.05+0.71%

Twitter was under pressure after hackers gained access to accounts belonging to several business leaders and politicians, including Amazon CEO Jeff Bezos, Tesla CEO Elon Musk and former President Barack Obama, in an apparent attempt to steal bitcoin.

TickerSecurityLastChangeChange %
TWTRTWITTER INC.37.14-0.55-1.46%

American Airlines sent warnings to 25,000 employees who face a potential furlough as demand for air travel has slowed amid the recent spike in COVID-19 infections.

Norwegian Cruise Line Holdings plans to raise $1.175 billion through the sale of debt and equity as the cruise operator fights to survive while voyages remain on hold due to COVID-19.

TickerSecurityLastChangeChange %
AALAMERICAN AIRLINES GROUP INC.13.03-0.01-0.08%
NCLHNORWEGIAN CRUISE LINE HOLDINGS LTD.13.99-0.25-1.76%

Looking at commodities, West Texas Intermediate crude fell over 1 percent to $40.75 a barrel while gold slid $12.70 to $1,798.70 an ounce.

U.S. Treasurys ticked higher, pushing the yield on the 10-year note down to 0.611 percent.

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European markets were trading lower across the board after the European Central Bank kept policy unchanged with France’s CAC down 0.46 percent and Germany’s DAX off 0.43 percent. Britain’s FTSE was weaker by 0.67 percent.

In Asia, China’s Shanghai Composite plunged 4.5 percent after government data showed the Chinese economy grew at an annualized rate of 3.2 percent in the April-through-June quarter. Elsewhere in the region, Hong Kong’s Hang Seng slid 2 percent and Japan’s Nikkei shed 0.76 percent.