By Caitlin Ostroff and Karen Langley
U.S. stocks dropped Thursday as fresh data showed new unemployment claims remained elevated and investors continued to back away from bets on a smooth economic reopening.
The Dow Jones Industrial Average fell 508 points, or 1.9%, on track for its worst day in two weeks. The S&P 500 dropped 1.6%, with all 11 sectors losing ground. The tech-heavy Nasdaq Composite lost 0.9%.
New figures showed that 1.3 million Americans filed for unemployment benefits in the week ending July 4. Weekly claims have fallen from their highs but had held steady near 1.5 million in prior weeks, leading some economists to worry that the U.S. economic recovery is stalling.
Investors have remained focused on the prospects for economic recovery, supported by central banks and governments around the world, but have also parsed reports of a rising number of coronavirus cases in the U.S.
The U.S. reported more than 58,000 new cases Wednesday, according to data compiled by Johns Hopkins University, down slightly from the previous day.
"It's not surprising, depending on some of the headlines that scroll through at this time, you're going to have what we call basically a choppy market," said Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions. "It's going to be uneven. You're going to have fits and starts. The market seems to focus on any sort of bad coronavirus news."
Shares of companies whose prospects are tied to the economic reopening came under pressure. United Airlines Holdings, American Airlines Group, Wynn Resorts and Royal Caribbean Cruises each lost at least 6%.
Among individual stocks, shares of Walgreens Boots Alliance dropped 9.2% after the drugstore chain reported a quarterly loss and cited reduced traffic in U.K. stores. Bed Bath & Beyond shares lost 22% after the home-goods chain said it would permanently close about 200 stores.
Analysts expect U.S. shares could move higher if investors holding on to cash see better economic data. In China, individual traders have supported the market's recent rise.
China's stock market zoomed ahead for the eighth day in a row, leading Asian indexes higher, while stocks in the rest of the world wavered.
The Shanghai Composite rose 1.4% Thursday, extending a winning streak that is now the longest since January 2018. Japan's Nikkei 225 Index was up 0.4% and Hong Kong's Hang Seng rose 0.3%.
"The day traders are actually a sizable part of the market," said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. He said the traders were looking at signals of the government's support for the economy: "If anywhere has had a V-shaped recovery, it's China."
The yield on the 10-year U.S. Treasury dropped to 0.620%, from 0.652% Wednesday. Yields fall as bond prices rise.
Write to Caitlin Ostroff at email@example.com and Karen Langley at firstname.lastname@example.org