WASHINGTON (dpa-AFX) - After showing a lack of direction earlier in the session, stocks have moved mostly lower over the course of the trading day on Thursday. The major averages have all moved to the downside, with the Nasdaq and the S&P 500 adding to the steep losses posted in the previous session.
Currently, the major averages are off their lows of the session but still firmly negative. The Dow is down 269.05 points or 0.7 percent at 40,929.03, the Nasdaq is down 96.61 points or 0.5 percent at 17,900.31 and the S&P 500 is down 25.47 points or 0.5 percent at 5,562.80.
The weakness on Wall Street partly reflects concerns about the near-term outlook for the markets following the tech sell-off on Wednesday.
The tech-heavy Nasdaq record its worst day since December 2022 after a report from Bloomberg said President Joe Biden's administration is considering tougher trade rules against companies in its chip crackdown on China.
Bloomberg said the administration has told allies that it's considering using the most severe trade restrictions available if companies continue giving China access to advanced semiconductor technology.
'Geopolitical tensions have acted as a stark reminder to investors that even the hottest of all investment trends can meet bumps in the road,' said Dan Coatsworth, investment analyst at AJ Bell.
'While the news flow from chip-related companies has been solid, the market seems a bit more nervous than usual,' he added. 'Early strength in the tech sector on Thursday quickly faded away, leaving investors wondering if we're now heading towards a full-blown correction in the sector.'
In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits climbed by much more than expected in the week ended July 13th.
The Labor Department said initial jobless claims rose to 243,000, an increase of 20,000 from the previous week's revised level of 223,000.
Economists had expected initial jobless claims to edge up to 230,000 from the 222,000 originally reported for the previous week.
Meanwhile, the Federal Reserve Bank of Philadelphia released a separate report showing the pace of growth reaccelerated by much more than expected in the month of July.
The Philly Fed said its diffusion index for current general activity jumped to 13.9 in July from 1.3 in June, with a positive reading indicating growth. Economists had expected the index to inch up to 2.9.
The report said most future activity indicators also rose, suggesting more widespread expectations for overall growth over the next six months.
The Conference Board also released a report showing a modest decrease by its reading on leading U.S. economic indicators in the month of June.
The report said the leading economic index edged down by 0.2 percent in June after falling by a revised 0.4 percent in May.
Economists had expected the leading economic index to dip by 0.3 percent compared to the 0.5 percent decline originally reported for the previous month.
Sector News
Airline stocks have moved sharply lower over the course of the session, dragging the NYSE Arca Airline Index down by 2.6 percent.
Substantial weakness also remains visible among pharmaceutical stocks, as reflected by the 2.6 percent slump by the NYSE Arca Pharmaceutical Index.
Computer hardware and software stocks are also seeing considerable weakness, contributing to the continued decline by the tech-heavy Nasdaq.
Healthcare, retail and banking stocks also moved notably lower on the day, while housing stocks continue to turn in a strong performance, with the Philadelphia Housing Sector Index surging by 3.3 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index plunged by 2.4 percent, while China's Shanghai Composite Index climbed by 0.5 percent.
The major European markets also ended the day mixed. While the German DAX Index fell by 0.5 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 0.2 percent.
In the bond market, treasuries are giving back ground after moving higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.1 basis points at 4.186 percent.
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