Wall Street Drifts on Thursday Morning

NEW YORK (AP) -- Wall Street is flipping between small gains and losses Thursday morning as rising infection levels of the coronavirus clash with hopes for a coming economic recovery.

The S&P 500 was virtually flat after erasing an earlier loss of 0.6%. It followed up on sharper losses across European markets and relatively mild moves in Asia. Treasury yields also slipped in a sign of increased caution.

The Dow Jones Industrial Average was down 10 points, or less than 0.1%, at 26,106, as of 10:20 a.m. Eastern time, and the Nasdaq composite was up 0.1%. Stocks that most need a reopening economy were down sharply at the start of trading, but they recovered as the morning progressed.

Markets worldwide have been showing more apprehension following a tremendous, nearly 40% rally for U.S. stocks that began in late March. Surprisingly strong reports on U.S. retail sales and employment have built hopes recently that the economy can pull out of its recession relatively quickly as governments ease up on lockdown orders.

But discouraging numbers on the coronavirus in various U.S. states and elsewhere in the world have dented the optimism. Even if authorities don't reimpose widespread lockdowns to slow the spread of the virus, the fear is that consumers and businesses could get frightened and pull back on spending. That would damage the fragile improvements that the economy seems to be developing.

A report on Thursday showed that the number of U.S. workers filling for unemployment benefits eased for the 11th straight week, down to 1.5 million from nearly 1.6 million. Economists, though, had been expecting to see a larger decline.

The number of workers who continue to get unemployment benefits also fell slightly. That's an indication that some employers have begun hiring workers again. But there, too, the improvement wasn't as healthy as economists had forecast.

One source of support seems to remain constant for markets, though: tremendous aid from central banks. The Bank of England on Thursday increased the size of its bond-buying program to keep interest rates low.

A day earlier, the chair of the Federal Reserve said it will continue to keep interest rates pinned at nearly zero, as well as purchase bonds in far-ranging corners of the market to support the economy. Huge, unprecedented programs by the Fed and Capitol Hill in late March were what helped the S&P 500 halt its plunge of nearly 34% when recession worries were at their height.

The S&P 500 has since shaved that loss to below 9%, with recent leadership often coming from companies that would benefit most from a reopening economy.

Such stocks bounced up and down with the overall market Thursday. Cruise operator Carnival fell to an early loss of 6.8% after it reported a $4.4 billion for the second quarter and said it can't predict when it will return to normal operations. But it later recovered and recent was up 0.1%.

Stocks of smaller stocks have also tracked with investors' expectations for the economy, and they likewise swung up and down Thursday. The Russell 2000 index of small-cap stocks was up 0.6% after earlier being down as much as 1%.

In Europe, German's DAX lost 0.9%, and France's CAC 40 fell 1%. The FTSE 100 in London dropped 0.4%.

In Asia, Japan's Nikkei 225 slipped 0.4%, South Korea's Kospi lost 0.4% and the Hang Seng in Hong Kong dipped 0.1%.

The yield on the 10-year Treasury slipped to 0.69% from 0.73% late Wednesday. It tends to move with investors' expectations for the economy and inflation.

A barrel of U.S. oil for delivery in July rose 1.1% to $38.37. Brent crude, the international standard, rose 1.2% to $41.20 per barrel.