Trader Peter Tuchman wears a DOW 30,000 hat as he greets friends outside the New York Stock Exchange (NYSE) in New York
Trader Peter Tuchman wears a DOW 30,000 hat as he greets friends outside the New York Stock Exchange (NYSE) in New York, U.S., November 24, 2020. REUTERS/Brendan McDermid

November 25, 2020

By Shriya Ramakrishnan and Shivani Kumaresan

(Reuters) – Wall Street’s main indexes were set for a subdued open on Wednesday as a surprise jump in weekly jobless claims added to signs that the labor market recovery was stalling amid a surge in COVID-19 infections.

The number of Americans filing first-time claims for jobless benefits totaled a seasonally adjusted 778,000 for the week ended Nov. 21, compared with 748,000 in the prior week, the Labor Department said. Economists polled by Reuters had forecast 730,000 applications.

“There is some concern that the labor market is taking a step backwards as opposed to forward on the heels of stimulus having run out and no more stimulus packages in the offing,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

With no fiscal stimulus in sight, hopes of a vaccine and recent data suggesting business activity would bounce back next year have lifted Wall Street’s main indexes to record highs and set the benchmark S&P 500 on course for its best November ever.

Market participants said they expected U.S. stocks to climb even higher, with a recent Reuters poll showing the S&P 500 is poised to rise 9% between now and the end of 2021. The index has surged 66% since the coronavirus-led crash in March and is up about 12.5% so far this year.

As investors returned to cyclical sectors such as industrials and energy, which are set to benefit most from an economic recovery, the S&P value index gained about 11% this month after underperforming the benchmark index all year.

But by 8:51 a.m. ET on Wednesday, the Nasdaq 100 futures rose 0.25%, outperforming the S&P 500 and the Dow futures , indicating demand for the technology mega-caps that are seen as relatively safe during the recession.

Dow e-minis were down 58 points, or 0.19%, and S&P 500 e-minis were down 2.25 points, or 0.06%.

Shares of major U.S. banks including JPMorgan Chase & Co and Citigroup were down between 0.5% and 1.7% in premarket trading, while technology heavyweights Facebook Inc and Microsoft Corp gained about 0.4%.

Trading volumes are expected to be light ahead of the Thanksgiving Day holiday on Thursday.

Among individual stocks, Gap Inc fell 11.5% in premarket trading as the apparel retailer missed quarterly profit expectations on Tuesday.

Moderna Inc gained 1.2% after securing a vaccine supply deal with the European Union.

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Arun Koyyur)

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