Stocks curb losses after jobless claims hit new pandemic-era low

Futures were pinned in the red on Thursday, pointing to a lower open for Wall Street’s regular session, with investors struggling to reconcile a still hot jobs market with an economy that’s seen its momentum dented by soaring COVID-19 infections. 

On Wednesday, the Dow Jones Industrial Average and S&P 500 Index posted their 3rd consecutive day of losses, and the technology-laced Nasdaq fell for the first time since last week. The market has mostly taken disappointing news in stride, but August’s jobs data falling far short of market expectations last week tempered hopes for the fourth quarter.

On Wednesday, two releases underscored how investors are trying to calibrate a jobs market that remains historically hot against growth that’s clearly losing momentum, based on the resurgence of COVID-19 infections led by the Delta variant.

The U.S. economy “downshifted slightly” in August as concerns grew over how the renewed surge of coronavirus cases would affect the economic rebound, the Federal Reserve said on Wednesday in its latest Beige Book. 

Separately, however, Labor Department data showed that open jobs hit yet another series record, with workers quitting their jobs en masse, and nearly 11 million positions unfilled. On Thursday, new jobless claims set a new pandemic era low at 310,000, temporarily allaying fears about the economy.

That data contrasted sharply with August payrolls, which showed the economy creating a relatively slim 235,000 new positions, and stoked speculation that the Federal Reserve’s Open Market Committee (FOMC) could alter its timetable for scaling back its stimulative bond-buying, which has propped up investor confidence.

The uncertainty has prompted analysts to scale back expectations for the economy for the remainder year. Goldman Sachs cut its forecast for fourth-quarter growth, citing a “harder path ahead” for consumer spending in the face of rising COVID-19 infections.

However, Wall Street does not appear overly-concerned, at least for now, given that stocks are still within view of recent highs.

“Economic news and the future direction of the stock market don’t have to be riding in the same car,” Hennessy Funds portfolio manager Josh Wein told Yahoo Finance Live on Wednesday. “The market remains incredibly compelling notwithstanding a lot of noise.”

8:30 a.m. ET: Stocks turn flat after jobless claims set new pandemic era low

The U.S. economy is losing momentum, but one thing it’s not losing is jobs: Initial unemployment claims checked in at 310,000 in the latest week, well below estimates and setting a new COVID-19 era low. Stocks took heart from the news, turning flat after spending the pre-market session n the red.

7:50 a.m. ET Thursday: Futures lower ahead of jobless claims

Here’s where markets were trading ahead of the opening bell:

  • S&P 500 futures (ES=F): 4,500.75, -11.75(-0.26%)

  • Dow futures (YM=F): 34,928.00, -84.00 (-0.24%)

  • Nasdaq futures (NQ=F): 15,587.75, -32.25(-0.21%)

6:15 p.m. ET Wednesday evening: Stock futures tick lower

Here’s where markets were trading in the after-hours session:

  • S&P 500 futures (ES=F): 4510, -2.25

  • Dow futures (YM=F): 35,004, -8.00

  • Nasdaq futures (NQ=F): 15,608.00, -12.00

By Javier E. David, editor at Yahoo Finance. Follow him at @Teflongeek