After moving sharply lower in early trading on Thursday, stocks continue to see notable weakness in the early afternoon. While selling pressure has waned from earlier in the session, lingering economic worries continue to weigh on the markets.
The major averages have climbed well off their lows for the session but currently remain stuck in negative territory. The Dow is down 34.55 points or 0.3 percent at 12,569.98, the Nasdaq is down 29.48 points or 1 percent at 2,858.50 and the S&P 500 is down 7.98 points or 0.6 percent at 1,333.47.
The weakness on Wall Street extends the downward move that has seen since the release of the Labor Department's disappointing employment report last Friday.
The report, which showed weaker than expected job growth in the month of June, raised concerns about the economic outlook that continue to negatively impact stocks.
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 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.
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.
In news from overseas, the Bank of Japan tweaked its asset purchase program, moving to buy more treasury-discount bills, but kept the overall size of its financial asset buying unchanged at 70 trillion yen.
The Japanese central bank held off on further monetary easing measures, believing that robust private consumption and spending on rebuilding after last year's earthquake will keep the country's economic recovery on track.
Reflecting concerns about the outlook for global demand, steel stocks are seeing substantial weakness in mid-day trading. The NYSE Arca Steel Index is down by 2.2 percent amid steel losses by AK Steel (AKS), Reliance Steel (RS), and Olympic Steel (ZEUS).
Gold stocks are also seeing considerable weakness, extending the steep downward move seen over the past few sessions. After hitting a nearly two-month intraday low earlier in the session, the NYSE Arca Gold Bugs Index has regained some ground but remains down by 2.1 percent.
The weakness among gold stocks comes amid a continued decrease by the price of the precious metal, with gold for August delivery sliding $17.70 to $1,558 an ounce.
Significant weakness also remains visible among networking stocks, as reflected by the 1.9 percent loss being posted by the NYSE Arca Networking Index. With the loss, the index has fallen to its lowest intraday level in almost three years.
Computer hardware, brokerage, and airline stocks are also posting steep losses on the day, moving lower along with most of the major sectors.
Meanwhile, housing stocks are bucking the downtrend by the broader markets, resulting in a 1.2 percent gain by the Philadelphia Housing Sector Index.
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 also showed notable moves to the downside on the day. While the U.K.'s FTSE 100 Index fell by 1 percent, the French CAC 40 Index and the German DAX Index dropped by 0.7 percent and 0.5 percent, respectively.
In the bond market, treasuries have moved modestly higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its prices, is down by 1.2 basis points at 1.486 percent.
by RTT Staff Writer
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