The Dow Jones Industrial Average plummeted as many as 1,000 points in the final hour of Thursday trading, marking the worst day for Wall Street since June.
At the close, the Dow was down 811 points, or 2.8%, while the S&P 500 lost 3.5%, or 125 points, and the Nasdaq Composite fell while the tech-heavy Nasdaq Composite slid 5%, or nearly 600 points.
The selloff was driven by a broad decline in shares for a number of major tech firms — including Facebook Inc., Apple Inc. and Microsoft Corp. — that have pushed the indices higher in recent months. Amazon.com Inc. also ended the day in the red: As of 4:00 p.m. ET, its stock tumbled 4.6% to $3,368.00. (It was back in the green in after-hours trading, albeit just 0.39% higher to $3,381.25.)
Many fashion and footwear stocks moved in tandem with their benchmarks: Blue-chip Nike Inc. fell nearly 3.4% to $112.85, while Skechers USA Inc. slipped 2.4% to $29.71 and Foot Locker also decreased 1.7% to $31.85. Similarly, Crocs Inc. slid 5.3% to $38.98 and Steven Madden Ltd. dipped 1% to $21.44, while Deckers Outdoor Corp. declined 4.5% to $198.24 and Wolverine World Wide Inc. dwindled 3.5% to $25.46. On the other hand, Under Armour Inc. was up 0.38% to $10.43, VF Corp. climbed 0.19% to $68.54 and Nordstrom Inc. grew 1.67% to $15.84.
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The pullback starkly contrasted the bullish trends seen this week. On Wednesday, the Dow surged above 29,000 for the first time since February — coming within 500 points of its record close — before reversing those gains today. In addition, both the S&P and Nasdaq finished yesterday’s session at all-time highs. (Since late March, the Dow has grown more than 50%, while the S&P has advanced upwards of 55% and the Nasdaq has improved nearly 70%.) Economists had pointed out factors including the Federal Reserve’s new monetary policy approach to help the struggling labor market, progress in the development of possible COVID-19 vaccines and constructive trade talks between Washington and Beijing as reasons for the solid growth.
However, some analysts have indicated that a selloff is long overdue and the market might be readying to consolidate its recent gains. This September — which is already a historically a weak month for stocks — threats to the U.S. economy remain: Congressional leaders are expected to return to the negotiating table regarding a new stimulus package. The federal government’s CARES Act, which provided financial relief to individuals and businesses impacted by the pandemic, expired for the most part at the end of July, and Democrat and Republican lawmakers have so far been unable to agree on another plan.
What’s more, a potential spike in the number of coronavirus infections across the country in the fall months ahead could lead to renewed lockdowns, stay-at-home orders and restrictions on nonessential businesses. Such a scenario could push many Americans back to unemployment as well as dent discretionary spending. Today, the Bureau of Labor Statistics announced the number of Americans who filed jobless claims last week fell to the lowest weekly level since mid-March. But the figures were not revised. In the report, the bureau staff shared that it has changed the way it accounts for seasonal fluctuation in the labor market. (Under the new methodology, the agency expects the data to be more accurate in the weeks to come, which could mean today’s numbers may be revised higher or lower.)