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S&P 500, Dow edge lower as COVID-19 cases rise, home sales drop

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S&P 500, Dow edge lower as COVID-19 cases rise, home sales drop
© Reuters. FILE PHOTO: A U.S flag is seen on the New York Stock Exchange in the Manhattan borough of New York City

By Shivani Kumaresan and Shreyashi Sanyal

(Reuters) – The and Dow Jones indexes edged lower on Thursday as a resurgence of COVID-19 cases globally sapped appetite for stocks, with data showing tepid U.S. home sales adding to the grim mood.

Investor sentiment dulled in the first half hour of trading, with eight of the 11 major S&P 500 sectors in the red.

American Airlines (NASDAQ:) Group Inc and Southwest Airlines (NYSE:) Co reported a smaller-than-expected quarterly loss, signaling a revival in travel demand. The performance of their shares was mixed though, with Southwest rising 0.5% and American Airlines falling 0.4%.

“Even with better-than-expected results from airlines this morning, at these elevated valuation levels, the market may have some agita digesting the cross currents from negative virus headlines,” said Cliff Hodge, chief investment officer for Cornerstone Wealth.

“As we get closer to the slower season, investors should start thinking about taking some risk off the table if they have not done so already.”

Shares of AT&T Inc (NYSE:) jumped 5.2% after the company’s wireless subscriber additions trounced analysts’ estimates.

Data showed existing home sales dropped 3.7% to a seasonally adjusted annual rate of 6.01 million units last month, the lowest level since August 2020, pulled down by an acute shortage of properties, which is boosting prices and making owning a house more expensive for some first-time buyers.

Speedy vaccination rollouts in the United States has improved the pace of economic recovery, infused confidence among people and given a solid start to the first-quarter earnings season.

However, a surge in COVID-19 cases in India and elsewhere in Asia is weighing on sentiment.

A Labor Department report showed initial claims for state unemployment benefits totaled 547,000 for the week ended April 17 compared to 586,000 in the prior week. The data suggested layoffs were subsiding and strengthened expectations for another month of blockbuster job growth in April.

At 10:28 a.m. ET the was down 150.19 points, or 0.44%, at 33,987.12, the S&P 500 was down 7.42 points, or 0.18%, at 4,166.00 and the was up 10.43 points, or 0.07%, at 13,960.65.

Chipmaker Intel Corp (NASDAQ:) is expected to post a drop in first-quarter revenue later in the day, with analysts looking forward to updates on its U.S. manufacturing plants and chips for automakers amid a global microchip supply shortage. Its shares fell 1%.

Declining issues outnumbered advancers for a 1.06-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.38-to-1 ratio on the Nasdaq. The S&P index recorded 58 new 52-week highs and no new low, while the Nasdaq recorded 54 new highs and 6 new lows.

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S&P 500, Dow edge lower as COVID-19 cases rise, home sales drop

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