Stocks have moved sharply lower in early trading on Thursday, extending the downward move seen over the past few sessions. The major averages have slid firmly into negative territory, pulling back further off last week's highs.
The major averages have edged up off their lows for the young session in the past few minutes but remain stuck in the red. The Dow is down 92.37 points or 0.7 percent at 12,512.16, the Nasdaq is down 37.92 points or 1.3 percent at 2,850.06 and the S&P 500 is down 13.11 points or 1 percent at 1,328.34.
The early weakness on Wall Street reflects lingering concerns about the global economic outlook along with continued uncertainty about the European debt crisis.
Traders also continue to digest yesterday's release of the minutes of the latest Federal Reserve meeting, which gave no hint that a third round of quantitative easing is imminent.
Meanwhile, traders have largely shrugged off a report from the Labor Department showing a notable drop in weekly jobless claims, as the decrease largely reflected seasonal distortions.
The report showed that jobless claims fell to 350,000 in the week ended July 7th from the previous week's revised figure of 376,000. The drop surprised economists, who had expected jobless claims to edge up to 375,000 from the 374,000 originally reported for the previous week.
With the unexpected drop, jobless claims fell to their lowest level since coming in at 348,000 in the week ended March 8, 2008.
However, the Labor Department noted that the unexpected drop reflected distortions caused by fewer auto plant shutdowns than normal during this time of year. The distortions are expected to unwind over the coming weeks.
Steel stocks have moved sharply lower amid concerns about the outlook for global demand, with the NYSE Arca Steel Index falling by 2.8 percent. Considerable weakness is also visible among gold stocks, which are moving lower along with the price of the precious metal.
Networking, computer hardware, and semiconductor stocks have also come under pressure, reflecting weakness in the tech sector. Most of the other major sectors have also moved to the downside, with oil service, brokerage, and natural gas stocks posting notable losses.
In overseas trading, stock markets across the Asia-Pacific region saw significant weakness during trading on Thursday. Japan's Nikkei 225 Index ended the day down by 1.5 percent, while Hong Kong's Hang Seng Index tumbled by 2 percent.
The major European markets have also shown notable moves to the downside on the day. While the U.K.'s FTSE 100 Index is down by 1.1 percent, the French CAC 40 Index and the German DAX Index are down by 0.8 percent and 0.7 percent, respectively.
In the bond market, treasuries continue to show a lack of direction after ending the previous session roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.49 percent.
by RTT Staff Writer
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