Shares fell on Thursday, indicating that technology stocks will decline in key indices as investors wait for their earnings and assess new data on the U.S. labor market.
The S&P 500 fell 0.8%, while the Dow Jones industrial average fell 0.7%. The technology-heavy Nasdaq Composite continued to fall 1.1% from Wednesday.
Allegations without work – a power of attorney for layoffs – remained above the pandemic peak of 695,000 before the coronavirus. New applications for unemployment benefits rose to 861,000 last week, halting a downward trend indicating an improved labor market. Economists expected claims to decline.
Stocks have recently taken a breather after rising higher for most of 2021. Some investors have been caught off guard by a rapid rise in government bond yields, apparently beating technological stocks that have benefited from years of low interest rates. Money managers are also concerned about high valuations.
Many investors are still excited about the outlook for equities. They point to the likely arrival of more fiscal stimulus as a factor that will increase economic growth and earnings in 2021, along with the reopening of sectors hit hard by the pandemic.