US STOCKS-S&P 500, Dow slip after grim data; Trump suggests election delay

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* Q2 GDP numbers show record 33% contraction

* Jobless claims also up, though lower than forecast

* Qualcomm, UPS, P&G up after results

* Dow falls 0.79%, S&P down 0.38%, Nasdaq up 0.34% (Updates to early afternoon)

July 30 (Reuters) - The S&P 500 and Dow fell on Thursday after data painted a worrying picture of the economy, while President Donald Trump floated the possibility of delaying the Nov. 3 presidential elections.

The U.S. economy suffered its steepest contraction since the Great Depression in the second quarter, as business activity came to an abrupt halt on efforts to slow the virus outbreak.

Jobless claims also rose in the latest 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, an idea immediately rejected by both Democrats and his fellow Republicans in Congress, the sole branch of government with the authority to make such a change.

Wall Street’s main indexes were headed for their fourth monthly gain in a row, with the benchmark S&P 500 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.

“Ultimately, buyers of equities, and high yield bonds are going to conclude that earnings are there to justify these valuations, and regardless of the progress of vaccines or medical treatments over the next six months, we could expect a stock market contraction ahead.”

The tech-heavy Nasdaq rose, boosted by Qualcomm Inc after the chipmaker forecast fourth-quarter revenue largely above estimates.

Apple Inc, Inc, Alphabet Inc and Facebook Inc will report earnings later on Thursday, 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 0.5%.

“Tech earnings will deliver at least as expected. It’s the part of the market that effectively is making everything okay, because it’s a big enough percent of major indices,” Toews added.

Economically sensitive sectors — financials, energy and materials fell the most among major S&P sectors.

At 1:08 p.m. ET, the Dow Jones Industrial Average was down 208.72 points, or 0.79%, at 26,330.85, the S&P 500 was down 12.43 points, or 0.38%, at 3,246.01. The Nasdaq Composite was up 35.44 points, or 0.34%, at 10,578.38.

The U.S. Federal Reserve on Wednesday acknowledged the surge in cases was likely stalling recovery, while pledging to support the economy as long as necessary, giving a boost to Wall Street’s three main indexes late in the session.

United Parcel Service Inc, and Procter & Gamble Co gained following quarterly results on Thursday, with Johnson & Johnson up slightly as it started human safety trials for its COVID-19 vaccine.

Corporate earnings have tended to be better than expectations so far, but the scale of the economic damage from the pandemic, and the likelihood it will drag on are weighing on investors’ minds.

Top officials from the Trump administration planned more talks with congressional Republicans and Democrats on Thursday, despite flagging hopes of reaching an agreement to extend coronavirus aid before a Friday deadline.

Declining issues outnumbered advancers for a 2.17-to-1 ratio on the NYSE and a 1.42-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and no new low, while the Nasdaq recorded 69 new highs and 26 new lows. (Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Patrick Graham and Shounak Dasgupta)