August 20, 2020

Wall Street stocks join global decline after weak US jobs data

A decline in global stocks spread to Wall Street on Thursday with disappointing data on America’s labour market adding to uncertainty over the Federal Reserve’s willingness to deploy new policy measures.

The S&P 500 opened 0.5 per cent lower, following a fall in the previous session as the main US stocks barometer edges further back from an all-time high it set earlier this week.

The price of US government debt also gained, sending yields lower, after data released on Thursday underscored the persistent weakness in the labour market even as other sectors such as house construction have begun to recover from the shock caused by coronavirus.

More than 1.1m Americans filed for first-time jobless benefits last week, higher than economists had forecast. The rise in claims from 971,000 the previous week reversed a two-week trend of improvement.

“The claims data this week are disappointing, following two weeks where the data had shown such impressive downside momentum,” said Thomas Simons, economist at Jefferies. ”

Meanwhile, a survey of manufacturers by the Philadelphia Fed suggested the recovery in the regional factory sector eased this month, echoing the findings of a similar report by the New York Fed published on Monday.

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The Dow could fall further behind the other major stock benchmarks after Apple splits its stock

Apple CEO Tim Cook arrives for Apples “The Morning Show” global premiere at Lincoln Center- David Geffen Hall on October 28, 2019 in New York.

Angela Weiss | AFP | Getty Images

The Dow Jones Industrial Average has been relying on its powerhouse Apple to shake off its coronavirus damage, but that’s about to change once the juggernaut’s stock split ends its dominance in the 30-stock gauge.

At Wednesday’s high of $468 that pushed Apple into the $2 trillion club, the tech giant’s weighting in the Dow stood at 11.4{6b17707e448e34f54d6d1a9e433426abf2addbba8938cba1c35a09fc0ada7803}, by far the biggest. Apple’s 4-to-1 split, which takes effect on Aug. 31, will drop its price to about $117 and boot its ranking all the way down to 16th or 17th. The new Apple weighting in the Dow will fall to just about 3.1{6b17707e448e34f54d6d1a9e433426abf2addbba8938cba1c35a09fc0ada7803}, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

The century-old blue-chip index is price-weighted, meaning stocks with higher share prices are given greater weight in the gauge. UnitedHealth has the second biggest weighting, at 7.8{6b17707e448e34f54d6d1a9e433426abf2addbba8938cba1c35a09fc0ada7803}. Most other equity indexes are weighted by market capitalization, including the S&P 500 and the Nasdaq Composite. Apple has the No.1 position in the