New COVID-19 restrictions in the US, rising unemployment claims, and no government aid in sight point to more short-term economic damage that dwarfs Wall Street’s vaccine euphoria this week.
Wall Street major stock indices opened lower Thursday as COVID-19 infections and concerns about the short-term economic damage overwhelmed this week’s positive news in the race for a vaccine soared.
The Dow Jones Industrial Average fell more than 183 points, or 0.62 percent, to 29,255.29 within minutes of the opening bell on Wall Street.
The broader S&P 500 index – an indicator of the health of retirement and college savings accounts – fell 0.37 percent, and the Nasdaq Composite Index lost 0.12 percent.
The Dow and S&P 500 closed at all-time highs on Monday after biotech company Moderna said preliminary test results showed its COVID-19 vaccine is 94.5 percent effective.
On Wednesday, Pfizer and BioNTech announced that the final results of the Phase 3 study of their COVID-19 vaccine showed 95 percent effectiveness – the highest success rate of any pandemic candidate in late-stage studies.
However, Pfizer news failed to sustain the stock rally as investors questioned whether the vaccine cheer was premature.
The encouraging results of Moderna and Pfizer come against a backdrop of record infections and hospitalizations in the US and an economic recovery that exacerbates inequalities.
Millions of unemployed are left behind and small businesses struggle to stay afloat.
And Washington is still bogged down with economists calling for another round of viral aid to keep the recovery – imperfect as it is – off the rails.
For those at the end of the recovery, the economic scars could have a lasting impact on their work lives and finances for years or even decades.
On Thursday, we learned that the number of Americans filing new jobless claims rose unexpectedly last week as new restrictions and curfews forced companies to close and fire workers.
Initial claims to state unemployment benefits rose 31,000 last week to 742,000, the US Bureau of Labor Statistics said Thursday.
Around 20.3 million Americans rallied unemployment from state and federal programs such as Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Assistance (PEUC) as of October 31.
While that’s a drop of more than 840,000 from the previous week, it’s not necessarily good news.
“We may see the top of those who have reached their 39-week PUA benefits,” Oxford Economics economists said in a statement to clients, adding that both the PUA and PEUC programs “am End of Year “The year and there is no indication that a stimulus package will be passed during the Lame Duck session of Congress.” “
Eviction moratoriums, student loan indulgence, and other federal programs launched in the spring to help people deal with the coronavirus crisis will also expire in late 2020.
New York announced on Wednesday afternoon that it would close all public schools in the city – the largest public school system in the United States – in an attempt to contain spiraling infections.
The Metropolitan Transit Authority warned against shedding 40 percent of subway service in New York City and laying off 9,300 jobs if Washington does not receive tax support. The move would jeopardize any attempt at economic recovery.
People wearing protective face masks wait in line in front of a CityMD emergency care facility in the Bronx, New York, United States as the global coronavirus outbreak continues [File: Shannon Stapleton/Reuters]
Retail stocks are in the spotlight on the Thursday leading up to the critical holiday shopping season.
L Brands Inc shares rose more than 16 percent after performing better than forecast. This was supported by an increase in sales at Bath & Body Works and Victoria’s Secret Lingerie.
However, shares in department store operator Macy’s Inc fell 2.7 percent after it was reported that sales fell more than 20 percent in the third quarter.