Shares fell on Thursday, signaling that technology stocks will lead to declines for major indices as investors waited for gains and are valuing new data on the US labor market.
The S&P 500 fell 0.8%, while the Dow Jones industrial average fell 0.7%. The technologically strong Nasdaq Composite continued its decline on Wednesday, down 1.1%.
Unemployment claims – a proxy for layoffs – remained above the peak of the 695,000 pre-coronavirus pandemic. New applications for unemployment benefits rose to 861,000 last week, halting a downward trend that indicated an improvement in the labor market. Economists expected a drop in claims.
Shares have taken a break in recent sessions, having risen further for much of 2021. Some investors have been caught off guard by a rapid rise in government bond yields, which appeared to beat technology stocks that benefited from years of low interest rates. Money managers are also worried about high ratings.
However, many investors remain optimistic about the outlook for the stock. They indicate the likely arrival of more fiscal incentives as a factor that will drive growth and higher gains in 2021, along with the reopening of sectors that have been severely affected by the pandemic.