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Private payrolls, initial claims — What you need to know in markets on Thursday

Myles Udland
Markets Reporter

Wednesday was a tough day for the tech sector.

In the morning, Twitter (TWTR) CEO Jack Dorsey and Facebook (FB) COO Sheryl Sandberg appeared before members of the Senate to face questions from lawmakers over the content and safety of their platforms.

Dorsey had a solo, follow-up session before the House. Several lawmakers also used their time at the hearing to note the absence of Alphabet (GOOGL) CEO Larry Page, who had been invited by the Senate Intelligence Committee but declined to attend the hearing.

On Wednesday, shares of both companies were caught up in a sector-wide decline for tech names, as Twitter lost 6% and Facebook dropped 2.3% amid a 1.2% decline for the tech-heavy Nasdaq. Wednesday’s selling, however, was uneven across the major indexes as the Dow close in the green, rising 0.1%, while the S&P 500 dropped a more modest 0.3%.

Facebook COO Sheryl Sandberg, left, accompanied by Twitter CEO Jack Dorsey are sworn in before the Senate Intelligence Committee hearing on ‘Foreign Influence Operations and Their Use of Social Media Platforms’ on Capitol Hill, Wednesday, Sept. 5, 2018, in Washington. (AP Photo/Jose Luis Magana)

On Thursday, the market’s attention will shift to the U.S. labor market with ADP’s report on private payroll growth and the weekly report on initial jobless claims both set for release in the morning.

Economists expect that private payroll growth totaled 200,000 during August, with this report coming just one day before Friday’s official jobs report.

Elsewhere on the economic calendar on Thursday, the August read on service sector activity from Markit Economics as well as the Institute for Supply Management’s gauge on non-manufacturing economic activity will also be released. Factory orders for July are also set to be published.

And on the earnings side, the week’s lone report from the S&P 500 will come after the market close when Broadcom (AVGO) reports results. Other companies reporting results Thursday should include Barnes & Noble (BKS), GameStop (GME), Five Below (FIVE), and Lands’ End (LE).

Shares of GameStop soared on Wednesday, gaining as much as 16% after DealReporter said the company is working with Perella Weinberg to explore the possibility of a sale.

Investors on Thursday will also continue to watch the yawning gap between the performance of U.S. and international equities.

Bespoke Investment Group noted Wednesday that the S&P 500’s relative performance compared to the rest of the world is at its highest in at least 18 years.

Now, U.S. markets have been outperforming the rest of the world for most of the post-crisis period and as Bloomberg Intelligence’s Gina Martin Adams noted Wednesday, there is some precedent for an extended run — starting in 1988, U.S. stocks did better than their global peers for most of the next 13 years.

But as the rest of the world continues to grapple with financial crises in emerging markets, a rising dollar, and an uncertain trade environment, the most pressing question for investors over the balance of 2018 is whether — and how — these divergent paths resolve.

The U.S. stock market has outperformed the rest of the world by the largest amount in almost two decades. (Source: Bespoke Investment Group)

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland