Wall Street retreats with global markets as rally fades

NEW YORK (AP) — Wall Street is retreating in early trading Thursday following a mixed set of reports on the economy, including one showing that layoffs continue across the country at a stubbornly steady pace.

The S&P 500 was 0.6% lower after the first half hour of trading, following markets worldwide downward. Stocks in China dropped particularly sharply after a report showed shoppers there are slow to spend even though its economy returned to growth. Treasury yields also sank in a sign of increased caution.

The Dow Jones Industrial Average was down 106 points, or 0.4%, at 26,763, as of 10 a.m. Eastern time. The Nasdaq composite took a harder fall, down 1.1%.

They’re the latest ebbs for markets, which have been churning up and down for a little more than a month. Pulling markets higher have been signs of strengthening in the economy as lockdowns have eased, along with massive aid from the Federal Reserve and Capitol Hill. Hopes for a potential COVID-19 vaccine also helped the S&P 500 erase most of an earlier 34% drop from its record, down to less than 5% by Wednesday.

But pushing markets lower has been the relentless rise of coronavirus counts across much of the United States, which threatens to undo all the improvements. California has already brought back orders for bars and other businesses to close due to a surge in cases, and the worry is other states will have to follow suit.

Reports on Thursday showed that layoffs across the country remain stubbornly high, with 1.3 million workers filing for unemployment benefits last week. That’s down slightly from the prior week, but only by 10,000. The improvement was also weaker than economists expected.

That collided with a separate report showing retail sales grew more strongly last month than economists expected, particularly for clothing.

The yield on the 10-year Treasury fell to 0.61% from 0.63% late Wednesday. It tends to move with investors’ expectations for the economy and inflation.

Tech stocks were among the market’s hardest hit, a turnaround from their remarkably resilient run through much of the pandemic. Twitter slumped 2.5% after a breach in its security allowed hackers to break into the accounts of some of the world’s most followed political leaders and tech moguls.

Microsoft fell 1.9%, and Apple lost 1.2%. It’s a rare step back for the giants, which are both still up roughly 30% for 2020 on expectations that they can keep growing almost regardless of the pandemic.

In Asia, stocks in Shanghai slumped 4.5% for their worst day since February. It’s the third straight drop for them as some froth blows out of the market following a 15% surge in less than two weeks.

Tokyo’s Nikkei 225 lost 0.8%, the Hang Seng in Hong Kong fell 2% and Seoul’s Kospi shed 0.8%.

In Europe, Germany’s DAX lost 0.4%, and France’s CAC 40 was down 0.4%. The FTSE 100 in London dropped 0.4%.

Benchmark U.S. crude oil lost 43 cents to $40.77 per barrel. Brent crude, the international standard, gave up 43 cents to $43.36 per barrel.