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Dow Closes Lower on Disappointing Jobless Data, Tech Pullback

Stocks finished lower Thursday as Wall Street digested a disappointing report on U.S. jobless claims and as a rally in technology stocks fizzled.

The Dow Jones Industrial Average finished down 405 points, or 1.45%, to 27,534, and the S&P 500 fell 1.76%.

The Nasdaq Composite tumbled 1.99% after trading higher earlier in the session. Apple fell 3.2% and Microsoft gave back 2.8% on Thursday.

Stocks were coming off Wednesday’s solid session, which saw the S&P 500 rise 2.01% – its best day since June – and the Nasdaq put an end to a three-day losing streak that lopped 11% off the tech-heavy index.

“The big picture is that the recovery is still on track but that signs of weakness bear watching,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “The medical risks have improved significantly, but the economic risks are still real.”

The disappointing U.S. jobless claims report exposed weaknesses in a labor market recovery.

First-time jobless claims in the U.S. held below 1 million for a second straight week but came in higher than economists’ forecasts.

The Labor Department reported Thursday that 884,000 Americans filed for first-time jobless benefits for the week ended Sept. 5, but they remained unchanged from the previous week. Economists had forecast claims to fall to 835,000.

Millions of Americans still remain out of work even as companies have rehired furloughed workers and the number of people filing for benefits has dropped from a near 7 million peak in March.

After months of struggling to overcome deep internal divisions over the scope of another relief package, Republicans presented a near-united front in support of their latest plan, while Democrats opposed it en masse, denying it the 60 votes it would have needed to advance.

The result was never in doubt, and Republicans held the vote largely in an effort to foist blame on Democrats for the lack of progress on a compromise.

Further stimulus from Congress also remains a question as a skinny aid bill from Republicans failed to advance as Democrats opposed the measure. Democrats have been pushing for more sweeping aid in what would be the fifth coronavirus stimulus package.

Citigroup said Thursday that Chief Executive Michael Corbat would be stepping down early next year, and will be succeeded by the group’s global consumer banking head, Jane Fraser.

Corbat has led Citigroup for eight years and spent more than four decades with the bank. Fraser, who has been with the bank for 16 years, will become the first woman to lead a major U.S. bank.