Stocks retreat as Trump preps social media and China crackdowns
NEW YORK - U.S. equity markets lost ground Thursday as President Trump prepared to sign an executive order putting more scrutiny on social media companies and as he signaled more tough talk on China.
The Dow Jones Industrial Average fell 148 points, or 0.58 percent, while the S&P 500 slipped 0.21 percent. Even with the pullback, the Dow and the S&P maintained the psychologically important levels of 25,000 and 3,000, respectively, reclaimed this week.
The tech-heavy Nasdaq Composite fell 0.46 percent as companies including Twitter and Facebook slid ahead of the president's signing of the executive order.
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CEO Mark Zuckerberg told Fox News Trump's plan is not the "right reflex" to counter his concerns.
On China, Trump announced plans to hold a press conference on Friday. This as Beijing passed a national security bill on Thursday that overrides Hong Kong’s autonomy, effectively ending the “one party, two systems” framework it had agreed to keep in place for the 50 years following the city's 1997 handover from Great Britain.
Meanwhile, on the economic front continuing jobless claims fell to 21.05 million in the week ended May 16, down from the prior week’s revised reading of 24.91 million, a sign Americans are returning to work following lengthy stay-at-home orders aimed at slowing the spread of COVID-19.
Initial claims for the week ended May 23 totaled 2.1 million, the Department of Labor reported Thursday, matching estimates.
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Also Thursday morning, data showed the U.S. economy contracted at an annualized rate of 5 percent in the second quarter, according to a second estimate released by the Commerce Department.
Looking at stocks, Dow component Boeing has restarted production of its 737 Max jet at a “low rate.” Production of the aircraft was halted in January, and it has been grounded since March 2019 following two crashes that killed everyone aboard.
Social-media stocks Twitter and Facebook were under pressure as President Trump readies an executive order that targets what he has characterized as political bias on the platforms. Both companies have repeatedly denied such claims.
American Airlines will cut management and support staff by 30 percent and may have to reduce its frontline worker count to navigate the difficult conditions caused by COVID-19, Reuters reports, citing a letter to employees. Additionally, rival Delta will announce two job-reduction programs on Thursday.
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On the earnings front, apparel retailer Abercrombie & Fitch reported a larger-than-expected loss and sales that fell short of Wall Street estimates as COVID-19 forced the closure of its stores.
Discount retailers Dollar Tree and Dollar General both beat sales and profit estimates as customers stocked up on goods amid stay-at-home orders.
Nio, the so-called Tesla of China, reported first-quarter sales fell 16 percent from a year ago amid the COVID-19 pandemic, which originated in Wuhan, China.
West Texas Intermediate crude oil edged up to $33.71 a barrel and gold climbed to $1,713.30 an ounce.
U.S. Treasurys were little changed, with the yield on the 10-year note at 0.703 percent.
In Europe, Britain’s FTSE added 1.3 percent, France’s CAC climbed 1.54 percent and Germany’s DAX rose 0.93 percent.
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Asian markets ended mixed, with Hong Kong’s Hang Seng slipping 0.72 percent while China’s Shanghai Composite and Japan’s Nikkei gained 0.33 percent and 2.32 percent, respectively.
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