US Stocks End Down After Jobless Claims Rise

Wall Street stocks tumbled on Thursday, with high-flying tech shares falling especially hard as a jump in jobless claims exacerbated worries about economic weakness.

The Nasdaq ended down 2.3 percent at 10,461.

The Dow Jones shed 1.3 percent to 26,652, while the S&P 500 dropped 1.2 percent to 3,235.

The Labour Department reported that 1.4 million people applied for jobless benefits last week, the first week-over-week increase in claims since the early days of the Covid-19 crisis this spring.

The weak jobs data added to negative investor sentiment on the heels of recent consumer tracking data that suggested lower activity and spending.

"The foundations to this recovery are cracking under the weight of a mismanaged health crisis," said a note from Oxford Economics that said its "recovery tracker" fell in 18 states in the first full week of July compared to the final week of June.

Major movie cinema chains including AMC Entertainment and Cinemark pushed back their timeframe for reopening cinemas, while Southwest Airlines and American Airlines both said they were trimming flight schedules in the coming period due to an ebbing of customer demand.

Lawmakers in Washington have begun debating whether to extend additional weekly payments made to unemployed people provided under the US$2.2 trillion Cares Act passed in March as businesses shut down to stop the spread of Covid-19.

Thursday's downward move was led by technology giants such as Apple, Amazon and Google parent Alphabet, all of which fell by more than three percent.

These companies have been the biggest winners on Wall Street amid the coronavirus pandemic and the shift to working at home.

This group includes Tesla, which fell 5.0 percent after announcing a surprise US$104 million second-quarter profit. Shares of the electric car maker have added more than US$1,000 this year. (AFP)