US Market falls on profit booking, rise in jobless claims

The US stock market finished session lower on Thursday, 23 July 2020, as investors opted to book recent gains due to unexpected rise in U.S. jobless claims and mixed earnings reports. Meanwhile, simmering Sino-U.S. tensions and growing signs of a worsening coronavirus pandemic also fueled selloff.

At closing bell, the Dow Jones Industrial Average dropped 353.51 points, 1.3%, at 26,652.33. The S&P 500 index shed 40.36 points, or 1.2%, to 3,235.66. The tech-heavy Nasdaq Composite Index lost 244.71 points, or 2.3%, to 10,461.42.

Sectors in the S&P 500 index were mixed, led lower by real-estate and technology. Consumer Staples and financials bucked the trend.

 

The Labor Department data showed 1. 416 million Americans filed for first-time benefits for the week ending July 18, a rise of 109,000. It was the 18th straight week in which initial claims totaled more than 1 million, and it snapped a 15-week streak of declining initial claims. Continuing claims, which refer to those receiving benefits for at least two straight weeks, dropped by 1.107 million to 16.197 million for the week ending July 11. The weekly employment report has become one of the key measures of the state of the COVID-19 pandemic that has been resurgent in many U.S. states recently, forcing the reimposition of restrictions to curtail the spread of the deadly illness.

In the latest deterioration in Sino-U.S. ties, Beijing vowed to close the U.S. consulate in the southwestern city of Chengdu. The move comes after the U.S. ordered the closure of a Chinese consulate in Houston, citing fraud and espionage, highlighting rising tensions between the global superpowers.

Investors were awaiting for outcome of negotiations by lawmakers over further fiscal stimulus. Senate Republicans and the White House struck an agreement on a $1 trillion coronavirus relief package, as a $600 weekly supplement to unemployment benefits is set to expire at the end of this month. The proposal sets the stage for further talks between Senate Republicans and Democrats, who have coalesced around a $3.5 trillion bill that was passed in the House in May.

ECONOMIC NEWS: US Leading Economic Index Recovers Further In June- US leading economic index jumped by 2% in June after soaring by an upwardly revised 3.2% in May and plunging by 6.3% in April, the Conference Board reported on Thursday. The report said the coincident economic index spiked by 2.5% in June following a 1.6% jump in May. Meanwhile, the lagging economic index tumbled by 2.5% in June after slumping by 1.2% in the previous month.

Among Indian ADR, Dr Reddys Labs was down 0.51% to $54.47, ICICI Bank shed 0.48% to $10.35, Tata Motors dropped 1.96% to $7, Wipro fell 0.51% to $3.89, and INFOSYS fell 0.49% to $12.24, while HDFC Bank added 0.06% to $50.15 and WNS Holdings rose 0.03% to $61.94. Vedanta ended flat at $6.02.

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