NEW YORK (AP) -- Stocks were heading lower in early trading Thursday after setting records over the past several days. Technology stocks, which have been the biggest driver of this year's rally, pulled back the most.
The S&P 500 fell 0.7% in the first hour of trading, and the technology-heavy Nasdaq composite gave back 1.8%. The S&P 500 had been up nine of the last 10 trading days. The Dow Jones Industrial Average fell 167 points, or 0.6%, to 28,911.
Big tech stocks, which account for a significant chunk of the U.S. stock market's value these days, fell broadly. Apple dropped nearly 3%, Amazon was down 2% and Facebook was down roughly 2.5%. Relatively smaller tech stocks were down as well, like Twitter.
Investors were also taking into account the latest economic figures.
The government reported that the number of Americans who applied for unemployment benefits fell last week to 881,000, a still very high number but slightly better than what economists had expected. A gauge of the services sector also came in slightly worse than economists were looking for.
The stock market has rallied this spring and summer after plunging in March as investors realized the economic toil the coronavirus pandemic was going to cause. Most of the rally has been on strong performances from tech stocks, but also a hope that the worst of the pandemic is in the past, despite rising infections in schools and the possibility of a second surge of infections in the fall. Huge amounts of support from the Federal Reserve and Congress have also helped bolster the economy.
Novavax, which is developing a coronavirus vaccine, was up nearly 8% on Thursday as investors placed bets that a vaccine could come as early as November.
Investors will be paying close attention Friday when the Labor Department releases its August job report. Economists surveyed by FactSet forecast that the U.S. economy created 1.4 million jobs in August, but that would be down from 1.74 million jobs in July. Tens of millions of Americans remain unemployed however, as seen by this week's unemployment benefits numbers.
A report by payroll processor ADP, widely watched as a forerunner of government employment data due out Friday, showed the private sector added 428,000 jobs in August, less than half the 1 million expected by forecasters.
If tomorrow's jobs numbers do not deliver, it's unlikely the stock market will rally much higher from here, analysts said.
Analysts said that could be a warning sign the job market is cooling after some U.S. states reimposed anti-virus controls and the expiration of supplemental unemployment benefits cut into consumer spending.
"Bullish stock market sentiment seems to be nearing a tentative peak as the labor market recovery stalls," analyst Edward Moya of Oanda wrote in a report.
U.S. crude oil for October delivery lost 37 cents to $41.13 per barrel. Brent crude, the international benchmark, fell 54 cents to $43.91 per barrel.