With traders reacting negatively to the latest batch of U.S. economic data, stocks moved to the downside at the start of trading on Thursday. The major averages all dropped into negative territory, extending the downward move seen over the two previous sessions.
The major averages have not seen much follow-through on their initial downward moves but remain in the red. The Dow is down 61.03 points or 0.5 percent at 13,065.18, the Nasdaq is down 15.70 points or 0.5 percent at 3,089.26 and the S&P 500 is down 8.59 points or 0.6 percent at 1,396.95.
The early weakness on Wall Street is partly due to profit taking, with some traders cashing in on the recent strength in the markets amid calls by a number of analysts for a correction.
Negative sentiment has also been generated by the release of a report from the Labor Department showing that jobless claims came in above economist estimates in the week ended March 24th.
The report showed that jobless claims edged down to 359,000 from the previous week's revised figure of 364,000. Economists had expected jobless claims to inch up to 350,000 from the 348,000 originally reported for the previous week.
The Labor Department noted that the latest figures reflect a revision to the weekly unemployment claims seasonal adjustment factors, resulting in revisions to the data going all the way back to 2007.
As a result of the revisions, the figure for the latest week reflects the lowest number of jobless claims since claims came in at 352,000 in the week ended April 19th, 2008.
A separate report from the Commerce Department showed that U.S. economic growth in the fourth quarter was unrevised, as a downward revision to exports was offset by an upward revision to non-residential fixed investment.
The report showed that GDP increased at an annual rate of 3.0 percent in the fourth quarter, unchanged from the previous estimate and in line with economist estimates.
Housing stocks have shown a notable downward move in early trading, dragging the Philadelphia Housing Sector Index down by 1.9 percent. Hovnanian Enterprises (HOV) and PulteGroup (PHM) are turning in two of the sector's worst performances.
Significant weakness has also emerged in the transportation sector, with airline and railroad stocks posting notable losses. Financial and energy stocks have also come under pressure.
Among individual stocks, Best Buy (BBY) is down by 6 percent after the consumer electronics retailer reported a fourth quarter loss compared to a year-ago profit. The company also announced plans to close 50 stores in the U.S. and to cut 400 jobs.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday, pulling back further off their recent highs. Japan's Nikkei 225 Index fell by 0.7 percent, while Hong Kong's Hang Seng Index tumbled by 1.3 percent.
The major European markets have also shown notable moves to the downside on the day. While the German DAX Index is down by 1.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 1.1 percent and 1 percent, respectively.
In the bond market, treasuries are moving modestly higher, climbing further off their recent lows. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.6 basis points at 2.16 percent.
by RTT Staff Writer
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