WASHINGTON (dpa-AFX) - After moving mostly lower early in the session, stocks have seen further downside over the course of the trading day on Thursday. With the steep drop, the S&P 500 has entered into contraction territory, plunging by more than 10 percent from its record highs in February.
In recent trading, the major averages have continued to fall to new lows for the session. The Nasdaq is down 382.47 points or 2.2 percent at 17,265.98, the S&P 500 is down 83.12 points or 1.5 percent at 5,516.18 and the Dow is down 553.40 points or 1.3 percent at 40,797.53.
The sell-off on Wall Street comes amid ongoing concerns about President Donald Trump's trade policies after he suggested the U.S. would respond to the European Union's countermeasures with even more tariffs.
With the EU saying it would impose tariffs on approximately $28 billion worth of U.S. goods in response to U.S. tariffs on steel and aluminum imports, Trump indicated the U.S. would react with reciprocal tariffs
'Whatever they charge us with, we're charging them,' Trump told reporters on Wednesday. 'Nobody can complain about that.'
Trump later threatened in a post on Truth Social to impose a 200 percent tariff on all wines, champagnes and alcoholic products coming out of the EU in response to a 'nasty' 50 percent tariff on whisky.
Meanwhile, traders have largely shrugged off a Labor Department report showing producer prices in the U.S. were unexpectedly flat in the month of February.
The Labor Department said its producer price index for final demand was unchanged in February after climbing by an upwardly revised 0.6 percent in January.
Economists had expected producer prices to rise by 0.3 percent compared to the 0.4 percent growth originally reported for the previous month.
The report also said the annual rate of growth by producer prices slowed to 3.2 percent in February from an upwardly revised 3.7 percent in January.
The annual rate of producer price growth was expected to dip to 3.3 percent from the 3.5 percent originally reported for the previous month.
A separate report released by the Labor Department unexpectedly showed a modest decrease by first-time claims for U.S. unemployment benefits in the week ended March 8th.
'Financial markets are paying more attention to announcements from the White House about tariffs and job cuts than the hard numbers,' said Bill Adams, Chief Economist for Comerica Bank.
Sector News
Retail stocks are turning in some of the market's worst performances on the day, with the Dow Jones U.S. Retail Index tumbling by 2.8 percent to its lowest intraday level in over four months.
Considerable weakness is also visible among computer hardware stocks, as reflected by the 2.6 percent slump by the NYSE Arca Computer Hardware Index.
Software stocks also continue to see significant weakness, dragging the Dow Jones U.S. Software Index down by 2.5 percent.
Adobe (ADBE) is leading the sector lower, plunging by 13.6 percent after reporting better than expected first quarter earnings but providing disappointing second quarter guidance.
Brokerage, networking and airline stocks are also seeing notable weakness, while gold stocks are among the few groups bucking the downtrend amid a sharp increase by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. Japan's Nikkei 225 Index edged down by 0.1 percent, China's Shanghai Composite Index fell by 0.4 percent and Hong Kong's Hang Seng Index slid by 0.6 percent.
Most European stocks also moved to the downside on the day. The German DAX Index and the French CAC 40 Index both decline by 0.6 percent, although the U.K.'s FTSE 100 Index closed just above the unchanged line.
In the bond market, treasuries have moved higher over the course of the session after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.7 basis points at 4.289 percent.
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