US STOCKS-S&P dips on grim data; U.S. election uncertainty, earnings

(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window)
* Q2 GDP numbers show record 33% contraction
* Jobless claims up for second week in a row
* Qualcomm, UPS, up after results
* Dow falls 0.86%, S&P down 0.44%, Nasdaq up 0.42%

(New throughout, updates prices, market activity and comments
to late afternoon; new byline, adds NEW YORK dateline)
By Sinéad Carew
July 30 (Reuters) - The S&P 500 and Dow were lower on
Thursday after data painted a worrying picture of the economy,
while President Donald Trump floated the possibility of delaying
the Nov. 3 U.S. presidential election, feeding market
uncertainty.
Investors also fretted ahead of high-profile earnings
reports and expiration of enhanced employment benefits on Friday
while a polarized Congress kept negotiating its next stimulus
package.
Second-quarter Gross Domestic Product (GDP) data showed the
U.S. economy suffered its steepest contraction since the Great
Depression, as business activity came to a halt due to lockdowns
aimed at fighting the pandemic. Also jobless claims rose last week, adding to signs the
momentum of economic recovery has slowed as coronavirus cases
spiraled in southern and western U.S. states. Shortly after the data, Trump, raised the idea of a delay in
elections. The idea was immediately rejected by both Democrats
and his fellow Republicans in Congress, the branch of government
with the power to make that change. But while the S&P was still lower it had pared losses
sharply by late afternoon after hitting its session low, so far,
at 1000 EDT (1400 GMT).
"Markets are trying to stabilize after having the door
thrown open to the worry closet," said Carol Schleif, deputy
chief investment officer, Abbot Downing in Minneapolis,
Minnesota.
At 2:36 p.m. ET (1836 GMT), the Dow Jones Industrial Average
.DJI fell 227.4 points, or 0.86%, to 26,312.17, the S&P 500
.SPX lost 14.19 points, or 0.44%, to 3,244.25 and the Nasdaq
Composite .IXIC added 44.50 points, or 0.42%, to 10,587.44.
Along with weak data, Schleif said worries included upcoming
earnings from companies including Apple Inc AAPL.O and
Amazon.com AMZN.O and Washington's battle over stimulus along
with uncertainty about the election.
But after the initial knee-jerk reaction, she said, people
stepped back and focused on Federal Reserve Chair Jerome
Powell's assurance on Wednesday that the central bank would "do
whatever it takes" to support the economy.
"You open the door it comes piling out, you're frightened
and then you settle down and start picking stuff up and putting
it back where it belongs," Schleif said.
The Fed also said a surge in virus cases was likely stalling
the recovery, which will depend significantly on the virus path.
Trump administration officials planned more talks with
lawmakers as hopes flagged for an agreement ahead of Friday's
deadline.
Of the S&P 500's 11 major sectors energy .SPSY , financials
.SPSY and materials .SPCM lagged the most. Technology
.SPLRCT consumer discretionary .SPLRCD and communications
services .SPLRCS eked out small gains.
Still Wall Street's main indexes were headed for their
fourth monthly gain in a row, with the benchmark S&P 500 only
about 4% below its February record high.
"The markets have over the past several months been detached
from reality and are being fueled by Fed buying and positive
momentum," said Phil Toews, chief executive officer of Toews
Corp in New York.
Tech-heavy Nasdaq was boosted by Qualcomm Inc QCOM.O , up
14.7%, after the chipmaker forecast fourth-quarter revenue
largely above estimates. Apple, Amazon.com, Alphabet Inc GOOGL.O and Facebook Inc
FB.O were all due to report earnings after market close, with
some on Wall Street questioning their valuations after this
year's gains.
Shares of the companies, which have a combined market value
of about $5 trillion, erased early losses to rise between 0.2%
and 1.3%. United Parcel Service Inc UPS.N , up 13.5%, added some
cheer following its quarterly results. Declining issues outnumbered advancing ones on the NYSE by a
2.08-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored decliners.
The S&P 500 posted 28 new 52-week highs and no new lows; the
Nasdaq Composite recorded 86 new highs and 26 new lows.