Wall Street falls at the open after US jobless claims rise

The main indices on Wall Street turned lower on Thursday morning as an unexpected rise in US weekly jobless claims dampened market sentiment. Shortly after the opening bell, the Dow Jones Industrial Average was down 0.64% at 29,249, while the S&P 500 fell 0.63% to 3,545 and the Nasdaq sank 0.26% to 11,771. The decline followed figures that showed US initial jobless claims rose to 742,000 in the week to November 14, up from 711,000 the week before and going against economist expectations of a fall to 707,000. “It looks as though the increase in initial claims reported today is not a one-time fluke; more likely, it captures the beginning of an upward trend which will persist until the Covid wave subsides.  We hope to see the case numbers peaking by the middle of next month, though much depends on the extent of the inevitable upward kick which will be triggered by Thanksgiving gatherings, but that still means that layoffs could continue to rise through the year-end", said analysts at Pantheon Macroeconomics. "Continuing claims will follow initial claims upwards.  Strength in the goods economy could offset weakness in services in November payrolls, but the outlook for December is clearly deteriorating, making it ever-clearer that Congress needs to act very soon, unless they believe that a wasteland in the services sector is a good base for the post-Covid recovery”, they added. 7.52am: Wall Street set for mostly lower start  After yesterday’s heavy losses, the Dow Jones and S&P 500 are set for a gentler decline while the NASDAQ Composite is tipped to open higher. The Dow Jones Industrial Average is pegged to open around 49 points lower at 29,389 while the broader-based S&P 500 is expected to shed 4 points to open at 3,564. The tech-heavy NASDAQ Composite is seen rising 66 points at 11,867, although stock in Nasdaq Inc (NASDAQ:NDAQ) was off in pre-market trading after the bourse's operator announced the US$2.75bn cash acquisition of anti-financial crime management specialist, Verafin. Iconic department store Macy’s Inc has somewhat set the tone with a third-quarter loss of US$91mln, equivalent to 29 cents a year. “Virus fears have hit an overextended global stock market this morning,” said Chris Beauchamp at IG. “After the soaraway gains of the past two weeks, equities now look much more richly-valued, and thus vulnerable to an outbreak of bad news. This is precisely what we got in the form of spreading infections in the US but also in Japan, a worrying sign indeed for a country that had been successful earlier in the year in controlling the spread. Even reports of success for AstraZeneca’s new vaccine were not enough, the impact of these vaccine announcements having been on a declining trend since the first, excitedly-received news from Pfizer almost three weeks ago. There appears to be little desire to chase equities at these levels, and perhaps rightly so, with markets looking priced for perfection and still vulnerable to some short-term turbulence,” Beauchamp said. Colorado became the most recent state to urge its residents to refrain from traveling on around next week's Thanksgiving holiday, as it attempts to stop the spread of the coronavirus. Today’s US economic diary features a number of releases, including the weekly jobs figures and existing home sales for October. Daiwa Capital Markets reports that sales are likely to record a slight dip in October, albeit from already elevated levels. “Following the disappointing NY Fed manufacturing survey released earlier this week, the latest manufacturing surveys from both the Philadelphia and Kansas Fed will also be of some interest to see whether a broader slowdown in momentum might be at play. Finally, today will also bring the Conference Board’s leading indicator for October and the weekly jobless claims report,” Daiwa reported. Four things to watch for on Thursday: The macro calendar will be in focus with US jobless claims figures for the week to November 14. Consensus predicts the figure will fall to 707,000 compared to 711,000 in the prior week Also in the macro diary is the latest Philadelphia manufacturing index for November, which is expected to decline to 25 from 32.3, as well as the Kansas Fed manufacturing index which is expected to fall to 18 from 23 In the earnings calendar, first quarter figures are expected from financial software firm Intuit Inc (NASDAQ:INTU), as well as third quarter numbers from discount clothing store chain Ross Stores Inc (NASDAQ:ROST) Share price reaction will also be eyed from department store chain Macy’s Inc (NYSE:M) after the company swung to a loss in its third quarter which was less bad than the market had feared