(Reuters) – The S&P 500 and Nasdaq were set to ease from record levels at the open on Thursday as a rally in technology stocks cooled and elevated levels of weekly jobless claims fueled worries about a struggling U.S. labor market.
The number of Americans filing for weekly jobless claims fell more than expected to 881,000 in week ended Aug. 29, easing from 1 million in the previous week. The government’s closely watched monthly payrolls report is set for Friday.
“We’re going to struggle to put people back to work, it’s going to be another three to four years and then we have to sustain it,” said Greg Hahn, chief investment officer at Winthrop Capital Management in Indiana.
Wall Street has rallied in recent weeks with the S&P 500 and Nasdaq hitting new closing highs, driven by the strength in tech-focused companies and unprecedented fiscal and monetary stimulus measures.
The Nasdaq has surged about 80% from its March 23 lows and the S&P 500 and Dow have gained about 60% from their lows. The blue-chip Dow needs to advance just about 2% to surpass its pre-crisis high hit in February.
But signs that the U.S. economic recovery is faltering has raised concerns about depleting fiscal aid. Investors are hopeful that the next coronavirus relief bill could be unveiled in the coming days.
Later in the day, data is likely to show ISM’s services index ticked lower to 57 in August from 58.1.
Shares of Apple Inc (AAPL.O), Adobe Inc (ADBE.O), Nvidia Corp (NVDA.O) and Netflix (NFLX.O), which have soared more than 70% this year, slipped between 1.4% and 2.3% in premarket trading.
Tesla Inc (TSLA.O) tumbled 6.5%, falling for the third session.
“There’s going to be a rotation at some point in time. There is this notion that we are closer to a vaccine, and everybody will get protected and we’ll get back to normal by the end of the year,” Hahn said.
At 8:38 a.m. ET, Dow e-minis 1YMcv1 were up 18 points, or 0.06%, S&P 500 e-minis EScv1 were down 12 points, or 0.34% and Nasdaq 100 e-minis NQcv1 were down 130.25 points, or 1.05%.
PVH Corp (PVH.N) rose 3.8% after Calvin Klein owner posted a surprise quarterly profit, boosted by strong online demand for comfortable and casual clothing during the coronavirus-led shift to work from home.