(RTTNews) – Following the pullback seen over the two previous sessions, stocks saw further downside during trading on Thursday. The major averages continued to give back ground after ending Monday’s trading at new record closing highs.
The major averages ended the day well off their lows of the session but still firmly negative. The Nasdaq slid 113.16 points or 0.5 percent to 22,384.70, the S&P 500 declined 33.25 points or 0.5 percent to 6,604.72 and the Dow fell 173.96 points or 0.4 percent to 45,947.32.
The continued weakness on Wall Street partly reflected ongoing concerns about the near-term outlook for the artificial intelligence trade.
AI player Oracle (ORCL) plunged by 5.6 percent on the day, although shares of Nvidia (NVDA) saw modest strength after moving notably lower over the two previous sessions.
Renewed uncertainty about the outlook for interest rates also weighed on the markets following the release of some upbeat U.S. economic data.
A report released by the Labor Department unexpectedly showed an extended pullback by first-time claims for U.S. unemployment benefits in the week ended September 20th.
The Labor Department said initial jobless claims fell to 218,000, a decrease of 14,000 from the previous week’s revised level of 232,000. Economists had expected jobless claims to inch up to 235,000.
Jobless claims pulled back further off the nearly four-year high set in the first week of September, falling to their lowest level since hitting 217,000 in the week ended July 19th.
The Commerce Department also released separate reports showing an unexpected surge by durable goods orders in August as well as much stronger than previously estimated GDP growth in the second quarter.
“The Fed’s September dot plot indicated that additional rate cuts are likely at their next two decisions in late October and December, but the case for back-to-back cuts is no slam dunk,” said Bill Adams, Chief Economist for Comerica Bank.
On Friday, the Commerce Department is scheduled to release its report on personal income and spending in August, which includes the Fed’s preferred readings on consumer price inflation.
Sector News
Airline stocks moved sharply lower over the course of the session, with the NYSE Arca Airline Index tumbling by 2.9 percent to its lowest closing level in over a month.
Significant weakness was also visible among pharmaceutical stocks, as reflected by the 2.0 percent slump by the NYSE Arca Pharmaceutical Index. The index also ended the session at a one-month closing low.
Biotechnology, healthcare and computer hardware stocks also saw considerable weakness, while gold stocks bucked the downtrend amid an uptick by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed narrowly mixed on Thursday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index closed just below the unchanged line and Hong Kong’s Hang Seng Index edged down by 0.1 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index slid by 0.6 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both fell by 0.4 percent.
In the bond market, treasuries are seeing continued weakness following the upbeat U.S. economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.5 basis points to 4.172 percent.
Looking Ahead
Trading on Friday is likely to be driven by reaction to the Fed’s preferred readings on consumer price inflation and the impact on the outlook for interest rates.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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