By Geoffrey Smith
Investing.com -- U.S. stock markets opened lower for a third straight day after data showing initial jobless claims fell more slowly than expected than last week, further stoking fears that the economy will struggle to rebound even as the country moves out of lockdown.
By 10:10 AM ET, the Dow Jones Industrial Average was down 378 points or 1.6% at 22,870 points, its lowest in over a month. The S&P 500 was down 1.5% and the Nasdaq Composite was down 1.4%.
Earlier, the Labor Department had said initial jobless claims fell to 2.98 million last week - the first week since March that they've been below 3 million but still considerably above expectations of 2.50 million. The numbers took the total number of initial claims since the pandemic erupted to over 36 million, or one quarter of the workforce.
Analysts at Pantheon Macroeconomics said the numbers showed a disappointingly slow decline in the rate of new claims, and said the number is now unlikely to drop below 1 million before the end of June.
"That said, the proportion of the previous week’s initial claims then appearing in the continuing claims numbers a week later has fallen for seven straight weeks, so hiring is not completely dead," Pantheon's Ian Shepherdson said in a note to clients.
The market was also rocked early Thursday by more aggressive rhetoric toward China from President Donald Trump, reviving fears of the trade war that rocked markets last year. Trump told Fox Business News that: "We could cut off the whole relationship" with China, something he said would "save" the U.S. $500 billion a year. Fox also reported that the administration is looking for ways to punish or seek financial compensation from China for what it sees as withholding information about the coronavirus.
Already this week, Trump has directed a federal pension program to divest its holdings of Chinese equities and signed an executive order extending a ban on U.S. companies doing business with telecoms company Huawei until the end of May 2021.
That helped push names such as Apple (NASDAQ:AAPL), which manufactures its smartphones in China, down 1.7%, while Tesla (NASDAQ:TSLA) stock, which relies in large measure on the Chinese market for its growth outlook, fell 2.5%.
Delta Air Lines (NYSE:DAL) stock fell 8.9% after a Reuters report detailing the likely extent of overstaffing at the end of the third quarter. The company is currently not allowed to lay off staff as part of the conditions for its bailout from the federal government. United Airlines stock fell over 10% after a class action was filed by employees to stop it forcing them to take off 20 days as unpaid leave, something they said violated the bailout conditions.
Elsewhere, Grubhub (NYSE:GRUB) stock fell 8.3% and Uber (NYSE:UBER) stock fell 3.6% as enthusiasm for their mooted combination cooled.
The day's winners were largely limited to those seen as gaining from the pandemic, including an array of biotech small caps, website maker Wix.Com (NASDAQ:WIX) and, of course, Netflix (NASDAQ:NFLX), which rose 1.5% to another all-time high.