US stocks open sharply lower

Companies in the JSE recorded double-digit share price declines on Monday morning (Photo: Bryan R. Smith, AFP)
Companies in the JSE recorded double-digit share price declines on Monday morning (Photo: Bryan R. Smith, AFP)

Wall Street stocks opened sharply lower Thursday after another spike in US jobless claims amid worries over rising coronavirus cases in some states that have reopened their economies.

About 35 minutes into trading, the Dow Jones Industrial Average stood at 26,138.71, down 3.2 percent, or about 850 points.

The broad-based S&P 500 shed 2.7 percent to 3,105.14, while the tech-rich Nasdaq Composite Index fell 2.1 percent to 9,811.49.

The Nasdaq has closed at records the last three days amid a major rally by US stocks following their March plunge. But some analysts believe traders have overestimated the likely economic rebound following coronavirus shutdowns.

Despite moves to reopen businesses nationwide, another 1.54 million US workers filed for unemployment benefits last week, the Labor Department reported, bringing the total initial claims since the shutdowns began in mid-March to 44.2 million.

The figure was lower than last week's jobless claims, but a gloomy reminder of the headwinds facing the US economy.

On Wednesday, Federal Reserve Chief Jerome Powell highlighted the uncertainty of the outlook after the central bank signaled it expects to keep interest rates lower for the next few years.

Analysts also pointed to rising coronavirus cases in some states that have reopened, a trend that could depress economic activity even if it doesn't result in more lockdowns.

Among individual companies, Grubhub rose 5.7 percent after agreeing to be acquired by Anglo-Dutch meal delivery firm Just Eat Takeaway.com for $7.3 billion, which would form the world's largest online food delivery company outside of China.

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