The S&P 500 lost ground on Thursday as investors took profits in advance of Friday’s jobs report, ending a four-day rally driven by rising economic sentiment. The TSX also fell for the first time this week.
The Nasdaq joined the S&P 500 in negative territory, while the blue-chip Dow posted a nominal gain.
“We were pretty overvalued going into this week,” said Chris Zaccarelli, chief investment officer, Independent Advisor Alliance, Charlotte, NC. “It’s not surprising to see a pullback.”
The market has shown remarkable resilience since its late March plunge, and the Nasdaq, S&P 500 and Dow remain within 3%, 9% and 12% of their respective record highs reached in February.
“This market has gone up so far so fast there’s a lot of people saying, ‘I’m going to take a little profit,’” said Jim Paulson, chief investment strategist at The Leuthold Group in Minneapolis.
Economic data showed the number of Americans filing for unemployment benefits dipped below 2 million for the first time since mid-March, and plummeting international commerce resulted in a net widening of the U.S. trade gap.
Friday’s much-anticipated jobs report from the Labor Department is expected to show the U.S. unemployment rate sky-rocketing to a historic 19.7%. Statistics Canada will also report on the May jobs picture on Friday for this side of the border; some half a million jobs are expected to have been lost, less steep than April’s loss of nearly two million, with the unemployment likely to soar above the record 13.1% set in 1982.
Violent protests against the death of George Floyd appeared to abate as prosecutors brought new charges against the officers implicated in the killing.
The European Central Bank approved a stimulus package that surpassed expectations, nearly doubling the size of its Pandemic Emergency Purchase Plan to 1.35 trillion Euros.
Its American counterpart, the U.S. Federal Reserve, is due to meet next week for its two-day policy meeting.
Unofficially, the Dow Jones Industrial Average rose 0.04% to end at 26,281.61 points, while the S&P 500 lost 0.34% to 3,112.33. The Nasdaq Composite dropped 0.69%, to 9,615.81.
The S&P/TSX Composite Index closed down 0.45%, or 69.51 points, at 15,505.60. Sectors were mixed, with real estate and energy stocks advancing more than 1%.
Read more: Stocks that saw action Thursday - and why
Reuters, Globe staff
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