A day after rallying, stocks were down on Thursday
A day after rallying due to the Fed’s softened tone on interest rates, stocks plummeted again on Thursday as unemployment is growing faster than expected. By the end of the day, the Dow Jones Industrial Average shed nearly 500 points, or 1.2%, to 40,346. The Nasdaq $NDAQ dropped 2.3%, while the S&P 500 lost 1.3%.
According to data released by the Labor Department on Thursday, initial jobless claims increased by 14,000 to 249,000 in the week ended July 27. Analysts were expecting it to be between 235,000 and 236,000. The data says that initial applications for U.S. unemployment benefits surged to the highest level in almost a year, providing further evidence that the labor market is slowing down.
The data has discouraged investors who were hoping for a reduction in interest rates in September after the Fed hinted at such a possibility on Wednesday.
Meta $META’s stock price spiked 4.8% by closing time as investors reacted to the social media giant’s second-quarter earnings report the day before. On Wednesday afternoon, the company posted better-than-expected sales and less-than-expected capital expenditures. Analysts had expected the company to spend a little over $9 billion, driven by the costs of its AI plans, but it spent $8.4 billion.
Meta has been working to develop a host of AI tools now embedded in its social media platforms Facebook, Instagram, and Whatsapp. Mark Zuckerberg has said he’s vying to make the company’s latest AI model, Llama 3.1, the most widely-used AI model by the end of 2024 and “the most advanced in the industry” by the beginning of next year.
Moderna $MRNA reported second-quarter revenue that exceeded estimates and a narrower-than-expected loss for the period. However, the company reduced its full-year sales forecast due to lower sales in Europe and potential delayed international revenue until 2025. Its loss per share was $3.33, compared to the expected loss of $3.39. The company’s revenue was $241 million, surpassing the expected $132 million.
Moderna’s shares were down 21% on Thursday.
—Laura Bratton contributed to the article.
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