The ASX is heading lower on Friday after Wall Street fell on Thursday after a mixed session saw megatech stocks resume their losses after Wednesday’s breather.
Driving some of the day’s weakness was another high jobless claims number which reminded investors of a stuttering economic recovery.
The Dow fell 405.89 points, or 1.45%, to 27,534.58, the S&P 500 lost 59.77 points, or 1.76%, to 3,339.19 and the Nasdaq Composite dropped 221.97 points, or nearly 2%, to close 10,919.59.
In addition, the US Senate on Thursday killed off a Republican bill that would have provided around $US300 billion in new coronavirus aid, as Democrats seeking far more funding, prevented it from going forward.
US first time jobless claims remained steady at 884,000 last week which added to the feeling that the economic rebound was slowing, perhaps starting to stall.
MSCI’s gauge of stocks across the globe lost more than 1% on losses on Wall Street and in Europe and mixed gains in Asia.
The falls will see the ASX 200 start more than 70 points lower when trading opens this morning. The ASX 24 futures platform was down 75 points just before 7 am (better than the 85 point loss at 6 am).
The Aussie dollar traded around 72.50 US cents and gold and oil prices weakened, as did iron ore.
US bond yields fell on those nerves about the recovery – the yield on the 10-year security ended at 0.6837%, from 0.703% on Wednesday.
Tech majors like Apple, Microsoft, and Amazon.com, all fell at least 2.8%. while Tesla rose 1.4%. That initially helped limit the Nasdaq’s losses before the tech-heavy index’s slide widened.
The S&P tech index slumped 2.28% on Thursday. Reuters said that despite the recent pullback, the tech index is up about 24% in 2020, outperforming the overall S&P 500’s rise of 3.3% in the same period.
Energy stocks dropped 3.7% as oil prices extended losses after the US Energy Information Administration (EIA) reported on a surprise build in crude stocks last week.
The meeting of the European Central Bank overnight was a bit of a damp squib – despite a lot of speculation about a big change to monetary policy, the central bank did nothing.
US West Texas Intermediate fell as did Brent (back under $US40 a barrel before a late bounce). In New York, West Texas Intermediate crude for October delivery on fell 75 cents, or 2%, to settle at $US37.30 a barrel.
In Europe, November Brent crude lost 73 cents, or 1.8%, to settle at $US40.06 a barrel.
Comex December gold rose $US9.40, or 0.5%, to settle at $US1,964.30 an ounce, following gains in each of the last two sessions.
Comex December silver meanwhile, settled 21 cents, or 0.8%, higher at US$27.291 an ounce after climbing 0.3% on Wednesday.
But copper fell with the December contract losing 1.7% to settle at $US2.9985 a pound on Comex.