US stocks slid later in the afternoon on Thursday, as investors trading during the holiday period digested fresh employment data and contemplated the outlook for the year ahead.
Wall Street’s blue-chip S&P 500 index had risen as much as 0.3 per cent earlier in the trading day, after inching up 0.1 per cent to a record closing high on Wednesday. However, a late afternoon slide landed the index in negative territory, down 0.4 per cent for the day.
Big name technology stocks and energy shares trailed, in spite of a 0.4 per cent rise in Brent crude oil prices to $79.23. The tech-heavy Nasdaq Composite gauge fell 0.2 per cent.
Employment data released on Thursday showed there were 198,000 initial jobless claims in the US in the seven days to December 25 — 8,000 fewer than in the previous week. The four-week moving average came in at 199,250, the lowest level for this average since October 1969, according to the US Department of Labor.
“Just like that [jobless] claims data is back to where it was in January 2020”, wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. He noted, however, that employers were still struggling to hire workers, and predicted that the employer-employee leverage scale “will continue to tip towards the latter”.
Cruise ship operators also moved lower on Thursday after an announcement from the Centers for Disease Control and Prevention warning travellers to avoid cruises regardless of vaccination status. Norwegian Cruise Line Holdings fell 2.6 per cent, while Carnival Corporation moved 1.3 per cent lower.
Across the Atlantic, Europe’s Stoxx 600 index rose 0.1 per cent, having closed 0.1 per cent lower on Wednesday. London’s FTSE 100 share gauge closed down 0.2 per cent, after adding 0.7 per cent in the previous session when it reopened following the Christmas break. France’s Cac 40 and Germany’s Dax both added 0.2 per cent.
In Asia, Hong Kong’s Hang Seng was up 0.1 per cent and Tokyo’s Nikkei 225 slipped 0.4 per cent lower.
Although cases of Covid are on the rise across much of the world, investors have taken note of preliminary studies suggesting that the highly transmissible Omicron coronavirus variant may result in a lower share of hospitalisations among infected patients than earlier strains.
“The markets are reflecting the new reality that Covid is here to stay albeit more on our terms than its,” said Kevin Philip, managing director at Bel Air Investment Advisors. “Next year, in my opinion, we are facing less of a Covid-influenced world, and a return toward normalcy.”
Still, Tedros Adhanom Ghebreyesus, the World Health Organization’s director-general, warned on Wednesday of a potential “tsunami of cases”, arguing that Omicron’s high transmissibility could yet “increase hospitalisations and deaths”.
France on Wednesday registered its highest number of daily infections since the start of the pandemic, while the number of confirmed cases in the UK jumped to a record 183,000. The US seven-day rolling average rose above 265,000 on Tuesday, the country’s highest-ever daily tally, according to data from Johns Hopkins University.
In government debt markets, the yield on the benchmark US 10-year Treasury note dipped 0.05 percentage points to 1.50 per cent. Yields move inversely to bond prices.
Meanwhile, in thin holiday trading, futures linked to Europe’s wholesale gas price fell as much as 12 per cent to €84.90 a megawatt hour.