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Wall Street buckles on stimulus, jobless claims and coronavirus infections

Stocks fell Thursday, pointing to a third straight day of losses, as investors considered fast-dimming prospects for fiscal stimulus before the U.S. election and a host of new virus-related restrictions in Europe.

A disappointing print on new jobless claims also contributed to the risk-off mood. New unemployment insurance claims unexpectedly rose last week, hitting the highest level since mid-August, in yet another sign of the labor market’s sputtering recovery.

Traders also continued to fixate on whether a stimulus deal of any size will transpire within the next three weeks, even as recent comments from lawmakers have overwhelmingly dampened hopes. Treasury Secretary Steven Mnuchin, speaking at the Milken Institute Global Conference on Wednesday, said that “getting something done before the election and executing on that would be difficult, just given where we are in the level of details,” referring to talks with Democratic lawmakers. He and House Speaker Nancy Pelosi are set to speak again on Thursday to discuss stimulus measures, after having spoken Wednesday morning.

The three major indices hit session lows on Wednesday in the aftermath of Mnuchin’s remarks, with more relief to individuals and businesses viewed by many as a much-needed propellant in keeping economic activity on the upswing during the pandemic.

Overseas, countries and major cities across Europe imposed stricter orders to try and rein in a jump in new coronavirus cases. In London starting this weekend, individuals will be restricted from mixing with other households indoors, and in France, residents of Paris and eight other cities will be subject to nighttime curfews beginning Saturday.

A mixed set of corporate earnings this week has so far done little to buoy sentiment, with a number of big banks having reported results that underwhelmed against expectations. Wells Fargo (WFC) reported quarterly profit that was less than half that of the same period last year, and Bank of America (BAC) posted a drop in revenue and weaker sales and trading results than reported from major peers including JPMorgan Chase (JPM) and Citigroup (C).

Goldman Sachs (GS), however, broke away from the pack and delivered profit that doubled over last year, with results driven by strong fixed-income trading and asset management revenue.

Still, most big bank executives so far this week have suggested the worst of the pandemic’s impact on results may be behind them after an especially tough second quarter, though they acknowledged the distance still left to overcome in the economic recovery.

9:34 a.m. ET: Stocks open sharply lower after jobless claims disappointed

Here were the main moves in markets as of 9:34 a.m. ET:

  • S&P 500 (^GSPC): -38.58 points (-1.11%) to 3,450.09

  • Dow (^DJI): -266.98 points (-0.94%) to 28,247.02

  • Nasdaq (^IXIC): -149.57 (-1.26%) to 11,619.69

  • Crude (CL=F): -$1.48 (-3.61%) to $39.56 a barrel

  • Gold (GC=F): -$10.30 (-0.54%) to $1,897.00 per ounce

  • 10-year Treasury (^TNX): -1.3 bps to yield 0.709%

8:50 a.m. ET: Import prices increase for a fifth straight month

Import prices increased in September for a fifth straight month, albeit at a decelerating pace, as non-petroleum product prices rose, the Labor Department said.

Import prices increased 0.3% last month following an upwardly revised 1.0% gain in August. The increase matched consensus expectations, based on Bloomberg-compiled data. Excluding petroleum, import prices rose 0.7%, or faster than the 0.5% increase expected.

8:30 a.m. ET: Jobless claims jump in latest week as layoffs start to bite

Nearly 900,000 workers filed for new unemployment benefits last week, as a wave of major corporate layoffs start to show up in the data — just as the U.S. economy confronts rising COVID-19 infections. The jobless claims were the highest in nearly two months, and as UBS noted, comes at a time when the economy is transitioning “from hiring by companies with a future to firing by companies in structural decline.”

7:59 a.m. ET: Walgreens shares rise after retail pharmacy sales top estimates

Walgreens Boots Alliance (WBA) posted better than expected fiscal fourth quarter results as its retail pharmacy business grew amid the pandemic.

Retail pharmacy comparable sales increased 3.2% over last year, topping estimates for a 2.91% rise. Adjusted earnings of $1.02 per share were also ahead of estimates for 96 cents, but represented a decline of 28% over last year.

Walgreens’ prescriptions filled increased 1.6%, and its front-of-store sales rose 4.7% on the back of double-digit growth in its health and wellness category and 8% growth in its personal care category and personal protective equipment. Sales in its beauty category, however, fell slightly.

Walgreens said it expects fiscal 2021 adjusted earnings…

Read More: Wall Street buckles on stimulus, jobless claims and coronavirus infections

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