Wall Street slips, but tech strength helps it pare losses

NEW YORK (AP) — Wall Street closed broadly lower Thursday, but another indefatigable rise for big tech stocks helped the market trim its losses from earlier in the day. The S&P 500 lost 0.4%, and nearly three quarters of the stocks in the index fell. Among the hardest-hit were banks, oil producers and other companies that most need the economy to pull out of its recession. Stronger-than-expected profit reports from several companies helped the market regain some ground. So did steadying prices for Amazon and other big tech-oriented stocks, which are set to report their own results after Thursday’s trading ends. Treasury yields fell.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

Most of Wall Street is pulling lower on Thursday, but the indefatigable rise for big tech stocks is helping the market trim its losses.

The S&P 500 was down 0.5% in late afternoon trading, with nearly three quarters of the stocks in the index lower. Among the hardest-hit were banks, oil producers and other companies that most need the economy to pull out of its recession. Treasury yields were also sinking in a sign of increased caution.

The Dow Jones Industrial Average was down 247 points, or 0.9%, at 26,290, as of 3:07 p.m. Eastern time. But it had been down as many as 547 points earlier in the morning. The S&P 500 also clawed back most of an earlier loss, one that reached 1.7%.

Stronger-than-expected profit reports from UPS and other companies helped the market trim its losses. So did steadying prices for Amazon and other big tech-oriented stocks, which are set to report their own results after the day's trading ends. They helped the Nasdaq composite erase an earlier loss and climb 0.3%.

The jumbled trading comes after a report showed that layoffs are continuing at their stubborn pace across the country, denting hopes that the economy can recover nearly as quickly as it plummeted into recession. A separate report on Thursday showed that the U.S. economy contracted at a nearly 33% annual rate in the spring, the worst quarter on record.

Markets worldwide had already turned lower before those data releases dropped. An earlier report showed that Germany’s economy, Europe’s largest, suffered through its worst quarter on record during the spring, a contraction more than twice as sharp as during the global financial crisis in early 2009.

Investors had already been expecting the reports on the economy to be weak, “so the real story today for traders is earnings,” said Chris Larkin, managing director of trading and investment product at E-Trade Financial.

Thursday is scheduled to be the busiest day for profit reports among S&P 500 companies within the busiest week this earnings season.

With investors having to wait until after the market’s close for quarterly results from four of the biggest companies in the world, Larkin expected trading to be bumpy.

Earnings reports have mostly been better than Wall Street’s expectations so far, but they’ve been far below year-ago levels, before the pandemic struck. The big companies in the S&P 500 are on track to report a nearly 40% drop for the second quarter from a year earlier, according to FactSet.

Energy stocks had some of the market's sharpest losses, dropping in concert with oil prices amid worries about a weaker economy. Exxon Mobil dropped 4.7%, and ConocoPhillips lost 5.1%.

Financial stocks were also weak, hurt by a drop in interest rates that reins in the profits to be made from lending. JPMorgan Chase fell 3%, and Citigroup lost 3.3%

On the winning end was UPS, which jumped 14.6% after reporting revenue and profits for the spring that blew past analysts' expectations. It benefited from more people getting deliveries at home amid the pandemic.

Qualcomm rose 14.4% after it also reported stronger-than-expected quarterly results, while announcing it had resolved a dispute with Huawei and signed a new license agreement.

Apache soared 17.5% for the biggest gain in the S&P 500 after it said it made a major discovery of oil off the coast of Suriname.

The day's headline earnings reports are likely to come shortly after the day's trading ends. Amazon, Apple, Facebook and Google’s parent company are all reporting how they fared during the spring, and expectations are high.

Each of their stocks is up at least 14% this year, when the S&P 500 is close to flat. Amazon is up more than 60%. Each of the four also was up in Thursday afternoon trading.

Investors have continued to flock to such stocks on expectations that their growth will only continue as the pandemic accelerates life’s shift toward online. But with great expectations also comes the possibility of great disappointment, and discouraging reports from the four would have big effects on the market. They alone account for nearly 16% of the S&P 500 by market value.

Investors are also continuing to wait for signs of progress from Capitol Hill, where Congress is debating how and whether to offer more aid for the economy ravaged by the pandemic. An extra $600 in weekly unemployment benefits from the federal government is about to expire, and that cash is growing in importance as the number of laid-off workers ticks higher.

A little more than 1.4 million U.S. workers applied for unemployment benefits last week, according to a Thursday report from the Labor Department. That's up by 12,000 from a week earlier.

Thursday’s loss for the S&P 500 gives back some of its big gain from the day before, when the Federal Reserve pledged to keep interest rates at their record low but highlighted how uncertain the path is for the economy due to the pandemic. If the market stays at its current level, it would be the second time that the index has flip-flopped this week.

The yield on the 10-year Treasury fell to 0.54% from 0.58% late Wednesday. It tends to move with investors’ expectations for the economy and inflation.

Benchmark U.S. crude dropped $1.35 to settle at $39.32 per barrel. Brent crude, the international standard, fell 81 cents to $42.94 a barrel.

In European stock markets, Germany's DAX lost 3.5%, and France's CAC 40 dropped 2.1%. The FTSE 100 in London was down 2.3%.

In Asia, Japan's Nikkei 225 slipped 0.3%, South Korea's Kospi added 0.2% and Hong Kong's Hang Seng dropped 0.7%. Stocks in Shanghai slipped 0.2%.