Stocks rose to record levels on Thursday as investors looked more towards positive Q2 earnings and less towards slowing GDP growth and negative job market data. Both the Dow Jones Industrial Average and S&P 500 reach intraday and closing record highs. However, the tech-heavy Nasdaq underperformed due to a drop in mega-cap stocks like Facebook
In big initial public offering news, shares of Robinhood
Here's how the market settled Thursday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Nikola founder charged with three counts of fraud:
Trevor Milton, founder and former CEO of electric truck maker Nikola
The indictment claims that, from November 2019 to September 2020, Milton worked to defraud investors into buying Nikola shares through false statements about the company's technology and products.
"This is a very straightforward case, Milton told lies to generate popular demand for Nikola stock, Beginning at least in or about March 2020, when Nikola announced that its stock would become publicly listed, Milton became increasingly preoccupied with keeping Nikola's stock price high," U.S. Attorney Audrey Strauss told reporters at a press briefing Thursday, quoted by CNBC.
Jobless claims remain at 400K:
Initial unemployment claims came in at a higher-than-expected total again last week, marking the ongoing choppiness in job market recovery as the United States continues to grapple with the coronavirus pandemic.
Jobless claims totaled 400,000 for the week ended July 24, according to the Labor Department report published Thursday. This following the prior week's 424,000 unemployment claims, which were upwardly revised from the 419,000 previously reported.
Continuing jobless claims also posted a higher-than-expected total for the week ended July 17, totalling 3.269 million, an increase from the previous week's upwardly revised total of 3.262 million.
Second quarter GDP misses estimates as growth begins to stall:
The U.S. economy expanded by a smaller-than-expected margin in the second quarter, supporting concerns that the economy's recovery boom from the coronavirus pandemic recession is beginning to stall.
U.S. Gross Domestic Product (GDP) rose to a seasonally adjusted, annualized rate of 6.5% in the second quarter, according to the Bureau of Economic Analysis (BEA) report published Thursday. Consensus economists were expecting a rise 8.4%, Bloomberg reports.
"The increase in second quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic," the BEA said in a press statement. "In the second quarter, government assistance payments in the form of loans to businesses and grants to state and local governments increased, while social benefits to households, such as the direct economic impact payments, declined."
Beneath the headline, personal consumption--the largest component of U.S. GDP--topped estimates with a rise of 11.8%, accelerating from the first quarter's 11.4% increase. However, private inventories dropped more than 1.1 percentage points from headline GDP, while net exports took 0.44 percentage points and government consumption shaved off nearly 0.3 percentage points. Moveover, residential fixed investments subtracted about 0.5 percentage points from headline GDP.
