By Geoffrey Smith
Investing.com -- U.S. stock markets opened lower again on Thursday, extending the sharpest losses in two weeks that they made on Wednesday, as another modest drop in jobless claims failed to revive confidence in the outlook for the economy.
By 10 AM ET (1400 GMT), the Dow Jones Industrial Average was down 41 points or 0.2% at 25,405 points. The S&P 500 was down 0.3% and the Nasdaq Composite lost 0.5%.
Earlier, the Labor Department had said that another 1.48 million Americans had filed initial claims for jobless benefits last week. While that was another decline, it was a smaller drop than expected. Continuing jobless claims, which come in with one-week time lag, dipped below 20 million for the first time since April, however.
BNY Mellon (NYSE:BK) analyst John Vellis wrote in a research note Thursday that the pandemic is likely to leave lasting scars on the economy.
"The hardest-hit industries today — which include education, entertainment, travel, and food and accommodation — will not recover to pre-COVID levels of activity by the end of this year and instead will do so slowly during 2021," Vellis said. "Before the economic downturn, those sectors collectively employed more than 40 million workers, or roughly 25% of the labor force. We estimate that in just those sectors alone, there will be six million fewer jobs in these sectors at the end of 2020 and still four million fewer in 2021."
Among the biggest losers in early trade was Walt Disney (NYSE:DIS) stock, which fell 2.0% after the entertainment giant was forced to delay the reopening of its theme parks and resort hotels in California in response to the surge in new infections. At the other end of the scale, bank stocks responded positively to reports suggesting that the Federal Reserve is set to ease rules on their trading activities. The Fed is due to release the results of its annual stress tests later Thursday. Citigroup (NYSE:C), JPMorgan (NYSE:JPM) and Bank of America (NYSE:BAC) stock all rose over 2%.
Macy’s (NYSE:M) stock fell 2.4% after the department store owner said it will cut another 3,900 jobs nationwide in response to Covid-19 impacts, while Occidental Petroleum (NYSE:OXY) stock rose 1.7% after the oil producer said it would buy back up to $1.5 billion worth of senior notes due in 2021 and 2022, cutting a debt load that ballooned to $40 billion after its ill-timed acquisition of Anadarko last year. The prospect of deleveraging outweighed the company's bleaker warning that it expects to write $9 billion of assets down in the second quarter.