Stocks Swoon on Largest GDP Fall in History

The Dow Jones Industrial Average and S&P 500 closed lower on Thursday as investors digested a record-setting drop in U.S. economic activity. Those losses were kept in check, however, as shares of major tech companies rose ahead of earnings.

The 30-stock index came from hundreds of points on the minus side, to finish down 225.92 points to 26,313.65.

The S&P 500 fell 12.22 points to 3,246.22.

The NASDAQ gained 44.87 points to 10,587.81.

Apple, Amazon, Alphabet and Facebook, representing nearly $5 trillion in market capitalization, are all set to report after the bell. All four stocks rose slightly during regular trading.

The Big Tech reports come after each stock has posted massive year-to-date gains. Facebook and Alphabet are both up more than 14% in 2020. Amazon has surged 65.2% in that time and Apple is up 31% this year.

It is also the busiest day of the current earnings season with tons of companies including Ford, UPS and Procter & Gamble also posting results.

Meanwhile, U.S. weekly jobless claims came in at 1.434 million, roughly in line with estimates. However, continuing claims, or those who have been collecting for at least two weeks, totaled 17.018 million, up from about 16 million last week.

There was pressure on bank stocks. JPMorgan Chase, Goldman Sachs and Bank of America all fell at least 1.5%. Citigroup dropped 3.1%.

The move lower on Thursday follows a session that saw major averages posting solid gains after the Federal Reserve kept the overnight U.S. rate in a range between 0% and 0.25%. The central bank noted that while the economy has recovered slightly, activity and employment remain “well below their levels at the beginning of the year.”

Fed Chairman Jerome Powell added the central bank will keep an accommodative stance until the economy has “weathered” the effects of the coronavirus pandemic.

Prices for the 10-Year Treasury gained sharply, lowering yields to 0.54% from Wednesday’s 0.57%. Treasury prices and yields move in opposite directions.

Oil prices dropped $1.11 to $40.16 U.S. a barrel.

Gold prices dulled $7.20 to $1,946.20 U.S. an ounce.