Dow Plunges Over 200 Points Amid Record Drop In GDP

The market fell sharply on Thursday after the U.S. economy posted its worst quarter ever—contracting by 32.9% on an annualized basis—while the Nasdaq turned positive thanks to shares of Big Tech companies rising ahead of earnings.

 

The Dow Jones Industrial Average was down 0.8%, almost 250 points, on Thursday, while the S&P 500 fell 0.4% and the tech-heavy Nasdaq Composite gained 0.4%.

 

While the broader market fell, the Nasdaq turned positive thanks to shares of Big Tech companies like Apple, Amazon, Facebook and Google-parent Alphabet moving higher ahead of second quarter earnings later on Thursday.

 

“Tech stocks are working because they’re viewed as a safe haven,” says Mark Freeman, chief investment officer at Socorro Asset Management.

 

“Investors are clearly showing that they’re willing to pay for growth right now, while reopening trades have pulled back as the reopening of the country has stalled,” he adds.

 

Stocks tanked after data showed that the U.S. economy suffered its worst contraction ever in the second quarter, plunging by a record 32.9%—though economists were expecting a drop of 34.7%.

 

Markets also took a hit after weekly jobless claims came in at 1.43 million: While that was roughly in line with estimates, continuing claims rose to over 17 million from 16 million last week.

 

Meanwhile, the busiest week of earnings season continued, with Procter & Gamble and UPS moving higher after reporting strong sales of cleaning products and a surge in second-quarter home deliveries, respectively.