Stocks slide amid stimulus doubts, rising jobless claims

Stocks closed with losses for the third consecutive day Thursday after a rise in weekly unemployment claims and a narrowing window to pass a stimulus deal before Election Day shook markets.

The Dow Jones Industrial Average closed with a loss of just 20 points, falling 0.07 percent after dropping as much as 320 points after the opening bell. The Nasdaq closed with a loss of roughly 0.5 percent after falling by as much as 1.6 percent, and the S&P 500 closed with a loss of roughly 0.2 percent after falling by 1.3 percent

Thursday’s losses were driven primarily by fears that the Trump administration and Congress may be unable to strike a deal to boost the ailing economy before Nov. 3. 

Initial jobless claims for the week ending Oct. 10 spiked to 898,000, the Labor Department reported Thursday, along with 373,000 applications for Pandemic Unemployment Assistance for contractors, gig workers and others left out of the traditional aid program.

More than 25 million Americans are on some form of jobless aid, according to the Labor Department, and millions are struggling to get by after the July 31 expiration of a $600 boost to weekly jobless benefits that was passed through the $2.2 trillion CARES Act in March.

Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin have spent more than two weeks in negotiations toward a follow-up to that package, but have yet to make a deal. The prospects for a breakthrough have been complicated by differences between Trump, who has urged lawmakers to “go big,” and Senate Republicans, who have bristled at passing the administration’s initial offer over concerns about the debt.

Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday shot down the prospect of a coronavirus deal totaling between $1.8 trillion and $2.2 trillion — the range between the Trump administration proposal and Pelosi’s counteroffer. 

“I don’t think so. That’s where the administration is willing to go. My members think half a trillion dollars, highly targeted, is the best way to go,” McConnell said, asked about the prospect of a deal within that range.

Updated 4:24 p.m.