Dow, S&P 500 threaten to extend losing streak to 4 days as stocks lose steam

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By Mark DeCambre and William Watts

Stocks drifted modestly lower Thursday afternoon, giving up early gains attributed partly to indications President Joe Biden will expand COVID-19 vaccine mandates for federal workers.

Separately, investors were weighing weekly data on claims for jobless benefit insurance and parsing a decision by the European Central Bank to slow asset purchases, which could help to inform the Federal Reserve’s plans to scale back on COVID-era policies.

How are stocks trading?

On Wednesday, the Dow declined 69 points, or 0.2%, to 35031.07, while the S&P 500 dropped 6 points, or 0.1%, to 4514.07, marking a three-day losing streak for both indexes. The Nasdaq Composite ended lower by 88 points, or 0.6%, to 15286.64, breaking a four-day winning streak.

What’s driving markets

Equity markets got a modest lift after the White House signaled Biden would seek a fresh round of additional vaccine mandates for federal workers and push for those measures to be extended to employees of government contractors.

“He’s going to build on our mandates requirements, making it so that workers in the federal government or others have to get vaccinated, we’ve seen that work,” said White House press secretary Jen Psaki told MSNBC on Thursday.

But analysts also cautioned against reading too much into the market moves.

“The delta variant seems to be weighing on the minds of investors, so anything that curbs the spread could be perceived as a good thing,” said Mike Loewengart, managing director for investment strategy at ETrade.

“But the reality is that there’s a lot of factors at play when it comes to the market right now. So we’d caution being too quick to associate a direct cause and effect,” he said.

Meanwhile, several U.S. airlines on Thursday warned that third-quarter revenue would be weaker than previously forecast because the recent spike in COVID-19 cases saw consumers curtail travel plans. Airline stocks were mostly higher, however, with the U.S. Global Jets ETF (JETS) rising 2.4%.

The report on the White House’s plans to improve vaccination measures follows updates of weekly jobless claims and a policy statement from the ECB.

Initial jobless claims fell by 35,000 to 310,000 in the week ended Sept. 4, the Labor Department said Thursday, marking the lowest level of claims since the pandemic struck in March 2020 and the biggest decline in claims since late June.

Economists polled by The Wall Street Journal had estimated new claims would total 335,000.

Meanwhile, Europe’s central bank said that it would conduct asset purchases under its pandemic emergency purchase program, or PEPP, at a “moderately lower pace” after accelerating purchases in recent quarters. “Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favorable financing conditions can be maintained with a moderately lower pace of net asset purchases under the PEPP than in the previous two quarters,” the ECB said following a meeting of its Governing Council.

Read:’The lady isn’t tapering,’ says Lagarde as ECB slows asset purchases

The ECB said PEPP purchases would continue with an envelope of EUR1.85 trillion through at least the end of March 2022. The ECB left key interest rates unchanged, as expected. ECB President Christine Lagarde was hosting a news conference at 2:30 p.m. Frankfurt time, or 8:30 a.m. Eastern.

Meanwhile, New York Fed President John Williams, who gets a vote at every interest-rate-setting meeting, said late Wednesday the central bank is still on track to reduce its bond purchases this year.

“Recently, stocks were in an upside trajectory on falling expectations that the Fed will taper this year, and this was due to the latest disappointing U.S. jobs data,” said Charalambos Pissouros, head of research at JFD Group.

Williams’s comments, however, suggest to some that there remains a chance that the Fed will announce a tapering plan sooner than later.

Which companies are in focus?

How other assets are trading

–Steve Goldstein contributed to this article.

-Mark DeCambre

 

(END) Dow Jones Newswires

09-09-21 1355ET

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