Stocks sink as over 30 million Americans file for unemployment

A banner month for US stocks ended with a whimper Thursday as Wall Street winced at data showing the coronavirus crisis has put roughly 30 million Americans out of work.

The Dow Jones industrial average dropped as much as 446.96 points, or 1.8 percent, to 24,186.90 after the US Department of Labor said 3.8 million more workers sought unemployment benefits last week. That outpaced economists’ expectations for 3.5 million initial jobless claims.

The S&P 500 tumbled as much as 1.2 percent, while the tech-heavy Nasdaq fell 0.9 percent despite encouraging earnings reports from Twitter, Microsoft and Facebook.

The selloff closed out one of the market’s best months in decades. Optimism about states reopening their economies and hopes for a coronavirus treatment helped put the Dow and S&P on pace for their biggest monthly gains since 1987.

“I think we’d climbed very high into the stratosphere and the market can’t go up every single day, so this is a day to retrench a little,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “Maybe those job losses woke people up.”

Investors had to digest other dismal reports from the government as well as major companies that have taken a beating from the pandemic.

The US Commerce Department said consumer spending fell by a record 7.5 percent last month. Oil giant Shell cut its dividend for the first time since World War II amid plunging demand for fuel, while American Airlines reported a $2.2 billion net loss for the first quarter.

Wall Street was nevertheless poised to post solid gains for April following a brutal coronavirus-fueled downturn in March. The Dow was up roughly 12.4 percent for the month through Wednesday’s close, while the S&P had risen 13.7 percent and the Nasdaq had gained 11.7 percent.

“The market has had a powerful rally, and you expect there to be profit-taking,” said Quincy Krosby, chief market strategist for Prudential Financial. “What’s key, really, is what we are going to see globally, and that is can economies open without the [coronavirus] cases climbing higher?”

With Post wires