The Dow Jones industrial average dropped as much as 167.81 points, or 0.8 percent, at the open after the feds revealed more than 6.6 million people filed initial jobless claims last week as the coronavirus crisis spurred even more layoffs. The blue-chip index briefly climbed into the green but was off 155.47 points, or 0.7 percent, as of 9:45 a.m.
The S&P 500 and the Nasdaq Composite each fell as much as about 0.6 percent in early trading as investors wrestled with the record-breaking number. Futures for all three indexes had pointed to opening gains before the US Department of Labor released its weekly report an hour before the opening bell.
“Risk aversion will likely be the theme of the day as today’s jobless claims data highlights how fast American households are getting hit,” Ed Moya, senior market analyst at OANDA, wrote in a commentary.
Investors managed to shake off the record-shattering 3.3 million unemployment claims reported last Thursday as hopes for a stimulus package to address the coronavirus pandemic spurred a rally on Wall Street.
But the latest number more than doubled that total and blew past some of the most pessimistic estimates. Goldman Sachs expected 6 million jobless claims for the last full week of March, while economists in a Reuters survey predicted just 3.5 million.
“While extreme volatility is probably in our rearview mirror, we must now contend with worse than expected economic data which will put downward pressure on stock prices,” said Andrew Smith, chief investment officer at Delos Capital Advisors. “Patience is the name of the game.”