US Stock Rally Stalls on Layoffs

NEW YORK (AP) -- Stocks are stalling in early trading on Wall Street Thursday following a discouraging report showing that layoffs are picking up across the country with coronavirus counts.

The S&P 500 was 0.2% lower after the first 45 minutes of trading, easing off a rally that had sent it higher for four straight days. Other stock indexes around the world were mixed, while all the uncertainty dominating markets helped gold tick up again to its highest price in nearly nine years.

The Dow Jones Industrial Average was down 119 points, or 0.4%, at 26,886, as of 10:15 a.m. Eastern time, and the Nasdaq composite was down 0.4%. Most of the stocks in the S&P 500 were higher, and the benchmark index flipped between small losses and gains in early trading.

The relatively modest moves belie big cross currents pushing markets.

Thursday's headline economic report was a discouraging one showing that the number of workers filing for unemployment benefits rose last week by 116,000 to 1.4 million.

It breaks a stretch of 15 straight weeks of improvements, a streak that had raised investor optimism that the recession could prove to be shorter than expected. It comes as coronavirus counts continue to rise across much of the Sun Belt, leading to more business closures.

On the opposite end, though, were several better-than-expected reports on corporate profits. Also buoying the market are hopes that Congress can agree on more aid for out-of-work Americans just as an extra $600 in weekly unemployment benefits is set to expire.

Republicans in the Senate are set to unveil their proposals for a $1 trillion COVID-19 rescue package, though finding a compromise with the Democratic-controlled House of Representatives could be more difficult than in March, when Congress produced a $2 trillion rescue package.

PulteGroup jumped 10.7% for the biggest gain in the S&P 500 after the home builder said it made a bigger profit during the spring than Wall Street expected. Other stronger-than-expected earnings reports also helped to lift Whirlpool 8.2% and Twitter 5.2%.

On the losing end of the stock market were energy stocks, which slumped with the price of oil.

Thursday's trading is a microcosm of the volatile moves that have dominated the market in recent weeks.

Helping to lift stocks have been several reports on the economy and corporate profits that showed improvements from the spring and were better than expected. That's layered on top of massive aid for the economy promised by the Federal Reserve, including nearly zero interest rates.

But weighing markets down is a long list of challenges beyond the worsening coronavirus counts across much of the United States. They include worries about rising tensions between the United States and China, the world's largest economies, and the effect of the upcoming U.S. elections.

The yield on the 10-year Treasury dipped to 0.58% from 0.59% late Wednesday. Gold rose 0.7% to $1,877.60 per ounce and earlier touched its highest level since September 2011, which was shortly after it set its record above $1,900.

Benchmark U.S. crude slipped 0.5% to $41.69 per barrel. Brent crude, the international standard, lost 0.7% to $43.97.

In Europe, stock indexes were modestly higher after consumer goods giant Unilever said its sales held steady in the second quarter and German carmaker Daimler said that demand for its higher-end models remained good.

Germany's DAX index returned 0.2% while France's CAC 40 rose 0.1%. Britain's FTSE 100 gained 0.4%.

Earlier, in Asia, the Kospi in Seoul lost 0.6% after South Korea reported that its economy contracted 3.3% in April-June. Hong Kong's Hang Seng gained 0.5%, and stocks in Shanghai dipped 0.2%.