Dow Drops 500 Points in Early Trade

NEW YORK (AP) -- Stocks are falling in early Thursday trading on Wall Street as the market's see-saw week snaps sharply back downward.

The S&P 500 was 1.5% lower after the first 30 minutes of trading, following steeper losses in Europe and milder ones across much of Asia. Treasury yields also fell in a sign of increased caution, while gold ticked down from its record level.

The Dow Jones Industrial Average was down 503 points, or 1.9%, at 26,036, as of 10 a.m. Eastern time, and the Nasdaq composite was down 1%.

The losses come after a report showed that layoffs are continuing at their stubborn pace across the country, denting hopes that the economy can recover nearly as quickly as it plummeted into recession. A separate report on Thursday showed that the U.S. economy contracted at a nearly 33% annual rate in the spring, the worst quarter on record.

Markets worldwide had already turned lower before those reports were released. An earlier report showed that Germany's economy, Europe's largest, suffered through its worst quarter on record during the spring, a contraction more than twice as sharp as during the Great Recession

The losses for markets accelerated following the U.S. data reports, as well as a tweet from President Donald Trump suggesting the United States delay its presidential election in November, though that would require an act of Congress to do.

Thursday's loss for the S&P 500 also nearly mirrors its jump from the day before, when the Federal Reserve pledged to keep interest rates at their record low but highlighted how uncertain the path is for the economy, and how it's mostly dependent on what happens with the coronavirus pandemic. If the market stays at its current level, it would be the second time that the index has flip-flopped this week.

Energy stocks had some of the market's sharpest losses, dropping in concert with oil prices amid worries about weaker demand amid a struggling global economy. Exxon Mobil dropped 4.5%, and ConocoPhillips lost 9.5%.

Financial stocks were also weak, hurt by a drop in interest rates that reins in the profits to be made from lending. JPMorgan Chase fell 3.4%, and Citigroup lost 4.9%

Technology stocks held up better than the rest of the market, as they have through the pandemic. The sector fell 1.2% in Thursday morning trading, less than half the decline of financial stocks.

Four of the biggest tech-oriented companies are scheduled to report their latest quarter results after trading ends. Amazon, Apple, Facebook and Google's parent company are all up more than 12% this year, when the S&P 500 is down 0.2%. Amazon is up more than 60%.

Investors have continued to flock to such stocks on expectations that sales for the companies will continue to explode as the pandemic accelerates life's shift toward online. But with great expectations also comes the possibility of great disappointment, and discouraging reports from the four would have big effects on the market. They alone account for nearly 16% of the S&P 500 by market value.

Investors are also continuing to wait for signs of progress from Capitol Hill, where Congress is debating how and whether to offer more aid for the economy ravaged by the pandemic. An extra $600 in weekly unemployment benefits from the federal government is about to expire, and that cash is growing in importance as the number of laid-off workers ticks higher.

A little more than 1.4 million U.S. workers applied for unemployment benefits last week, according to a Thursday report from the Labor Department. That's up by 12,000 from a week earlier.

The yield on the 10-year Treasury fell to 0.54% from 0.58% late Wednesday. It tends to move with investors' expectations for the economy and inflation.

Gold pulled back a bit from its record heights, offering at least a pause to its huge rally amid a weakening dollar, rock-bottom interest rates and worries about the economy. It fell 0.3% to $1,947.20 per ounce.

Benchmark U.S. crude dropped 2.2% to $40.37 per barrel. Brent crude, the international standard, lost 1.9% to $43.27 per barrel.

In European stock markets, Germany's DAX lost 3.5%, and France's CAC 40 dropped 2.1%. The FTSE 100 in London was down 2.5%.

In Asia, Japan's Nikkei 225 slipped 0.3%, South Korea's Kospi added 0.2% and Hong Kong's Hang Seng dropped 0.7%. Stocks in Shanghai slipped 0.2%.