WASHINGTON (dpa-AFX) - Stocks have moved moderately lower during trading on Thursday, giving back ground following the strong upward move seen in the previous session. The major averages have all moved to the downside on the day, with the Dow and the S&P 500 pulling back off yesterday's record closing highs.
The Dow has fallen to a new low for the session in recent trading and is currently down 170.26 points or 0.4 percent at 42,341.74. The Nasdaq is down 69.04 points or 0.4 percent at 18,222.57 and the S&P 500 is down 20.07 points or 0.4 percent at 5,771.97.
The weakness on Wall Street comes following the release of a highly anticipated Labor Department report showing consumer prices in the U.S. increased by slightly more than expected in the month of September.
The Labor Department said its consumer price index rose by 0.2 percent in September, matching the increase seen in August. Economists had expected consumer prices to inch up by 0.1 percent.
The report also said core consumer prices, which exclude food and energy prices, climbed by 0.3 percent for the second consecutive month. Core prices were expected to rise by 0.2 percent.
Meanwhile, the Labor Department said the annual rate of consumer price growth slowed to 2.4 percent in September from 2.5 percent in August. Economists had expected the pace of price growth to slow to 2.3 percent.
The annual rate of core consumer price growth accelerated to 3.3 percent in September from 3.2 percent in August, while economists had expected the pace of growth to remain unchanged.
The bigger than expected increase by consumer prices has further offset optimism the Federal Reserve will continue to aggressively lower interest rates in the coming months.
CME Group's FedWatch Tool is currently indicating an 88.4 percent the Fed will lower rates by 25 basis points next month after slashing rates by 50 basis points last month.
'Disinflation continues, but anyone who thought the Fed was going to lower rates by another .50 basis points in November is dead wrong,' said Jamie Cox, Managing Partner, Harris Financial Group.
'When interest rates aren't high enough to lower growth, they aren't high enough to stifle inflation completely either,' he added. 'The Fed will lower rates, but at a measured pace from here.'
Negative sentiment has also been generated in reaction to a separate Labor Department showing first-time claims for U.S. unemployment benefits increased by much more than expected in the week ended October 5th.
The report said initial jobless claims climbed to 258,000, an increase of 33,000 from the previous week's unrevised level of 225,000. Economists had expected jobless claims to edge up to 230,000.
With the much bigger than expected increase, jobless claims reached their highest level since hitting a matching figure in the week ended August 5th, 2023.
Sector News
Telecom stocks have shown a significant move to the downside on the day, dragging the NYSE Arca North American Telecom Index down by 1.4 percent to its lowest intraday level in almost a month.
Notable weakness is also visible among computer hardware stocks, as reflected by the 1.2 percent loss being posted by the NYSE Arca Computer Hardware Index.
Housing and networking stocks are also seeing some weakness, while gold stocks have moved higher along with the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index rose by 0.3 percent, while China's Shanghai Composite Index jumped by 1.3 percent and Hong Kong's Hang Seng Index surged by 3.0 percent.
Meanwhile, the major European markets have moved to the downside on the day. While the U.K.'s FTSE 100 Index is just below the unchanged line, the French CAC 40 Index and the German DAX Index are both down by 0.4 percent.
In the bond market, treasuries are extending a recent downward trend in reaction to the inflation data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.1 basis points at 4.098 percent.
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