WASHINGTON (dpa-AFX) - Following the sell-off seen late in the previous session, stocks showed a notable rebound in early trading on Thursday. Buying interest waned over the course of the trading day, however, and the major averages eventually ended the day roughly flat.
The Dow managed to snap its ten-day losing streak, inching up 15.37 points or less than a tenth of a percent to 42,342.24, while the Nasdaq slipped 19.92 points or 0.1 percent to 19,372.77 and the S&P 500 edged down 5.08 points or 0.1 percent at 5,867.08.
The initial strength on Wall Street came as some traders looked to pick up stocks at reduced levels following Wednesday's steep losses, which saw the Dow tumble to its lowest closing level in over a month.
Wednesday's sell-off on Wall Street came after the Federal Reserve announced its widely expected decision to lower interest rates by a quarter point but forecast fewer than previously estimated rate cuts next year.
However, traders seemed somewhat reluctant to get back into the markets, as a batch of largely upbeat economic data seemingly provided support for the Fed's cautious approach to further rate cuts.
The Commerce Department released a report this morning showing the pace of U.S. economic growth unexpectedly surged by more than previously estimated in the third quarter.
The report said gross domestic product shot up by 3.1 percent in the third quarter, reflecting an upward revision from the 2.8 percent jump previously reported. Economists had expected the pace of growth to be unrevised.
A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended December 14th.
The Labor Department said initial jobless claims fell to 220,000, a decrease of 22,000 from the previous week's unrevised level of 242,000. Economists had expected jobless claims to dip to 230,000.
Sector News
Interest rate-sensitive housing stocks extended Wednesday's sell-off, with the Philadelphia Housing Sector Index tumbling by 2.6 percent to its lowest closing level in over five months.
The continued weakness among housing stocks came even though the National Association of Realtors released a report showing existing home sales spiked to an eight-month high in November.
Considerable weakness was also visible among interest rate-sensitive commercial real estate stocks, as reflected by the 1.6 percent loss posted by the Dow Jones U.S. Real Estate Index.
Semiconductor stocks also showed another significant another significant move downside, dragging the Philadelphia Semiconductor Index down by 1.6 percent.
Micron (MU) led the sector lower, plummeting by 16.2 percent after reporting better than expected fiscal first quarter earnings but providing disappointing fiscal second quarter guidance.
Computer hardware, oil producer and steel stocks also saw notable weakness on the day, while airline stocks moved sharply higher.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slid by 0.7 percent, while China's Shanghai Composite Index fell by 0.4 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index slumped by 1.1 percent, the French CAC 40 Index tumbled by 1.2 percent and the German DAX Index dove by 1.4 percent.
In the bond market, treasuries extended the steep drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.6 basis points to a six-month closing high of 4.570 percent.
Looking Ahead
A report on personal income and spending in the month of November is likely to be in focus on Friday, as it includes the Fed's preferred readings on consumer price inflation.
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