WASHINGTON (dpa-AFX) - Stocks moved modestly higher early in the session on Thursday but have come under considerable selling pressure over the course of the trading day. The major averages have pulled back well off their highs of the session and firmly into negative territory.
The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 301.31 points or 0.7 percent at 40,589.18, the Nasdaq is down 271.77 points or 1.5 percent at 17,647.22 and the S&P 500 is down 55.36 points or 1.0 percent at 5,565.49.
The downturn on Wall Street may partly reflect profit taking, with the pullback coming after the S&P 500 closed within striking distance of the record highs set in mid-July.
While traders remain optimistic about the outlook for interest rates following the release of the minutes of the Federal Reserve's latest monetary policy announcement on Wednesday, they may feel the likelihood of a rate cut next month has already been priced into the markets.
Traders may also have been reluctant to continue buying stocks ahead of the Kansas City Fed's Jackson Hole Economic Symposium, which gets underway later in the day.
Fed Chair Jerome Powell is scheduled to speak at the symposium in Jackson Hole, Wyoming, on Friday, with traders looking for the central bank chief's comments to provide further clarity about the outlook for rates.
Ahead of Powell's remarks, CME Group's FedWatch Tool indicate a 75.5 percent of a quarter point rate cut next month and a 24.5 percent chance of a half point rate cut.
Negative sentiment may also have been generated in reaction to a rebound by treasury yields, with the yield on the benchmark ten-year note bouncing off its lowest closing level in well over a year.
In U.S. economic news, the Labor Department released a report showing a modest rebound by initial jobless claims in the week ended August 17th.
The report said initial jobless claims rose to 232,000, an increase of 4,000 from the previous week's revised level of 228,000.
Economists had expected jobless claims to inch up to 230,000 from the 227,000 originally reported for the previous week.
Meanwhile, the National Association of Realtors released a separate report showing existing home sales snapped a four-month skid in July, with sales rebounding by slightly more than expected.
NAR said existing home sales shot up by 1.3 percent to an annual rate of 3.95 million in July after plunging by 5.1 percent to a revised rate of 3.90 million in June.
Economists had expected existing home sales to jump by 1.0 percent to an annual rate of 3.93 million from the 3.89 million originally reported for the previous month.
Sector News
Semiconductor stocks have come under significant selling pressure over the course of the session, dragging the Philadelphia Semiconductor Index down by 2.6 percent.
Considerable weakness also remains visible among gold stocks, as reflected by the 2.2 percent slump by the NYSE Arca Gold Bugs Index.
The index is pulling back off its best closing level in well over two years as the price of gold for December delivery tumbled $29.70 to $2,517.80 an ounce.
Software stocks have also shown a significant move to the downside, with the Dow Jones U.S. Software Index falling by 1.8 percent.
Steel, retail and biotechnology stocks have also moved notably lower as the day progressed, while modest strength remains visible among banking stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index jumped by 1.4 percent.
Most European stocks also moved to the upside on the day. The German DAX Index rose by 0.2 percent and the U.K.'s FTSE 100 Index inched up by 0.1 percent, although the French CAC 40 Index closed just below the unchanged line.
In the bond market, treasuries are giving back ground after trending higher over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 8.7 basis points at 3.863 percent.
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