While the markets experienced a late-day recovery attempt, stocks still ended Thursday's trading mostly lower after coming under pressure earlier in the day. The losses on the day extended the downward move seen over the course of the previous session.
The major averages climbed well off their worst levels of the day but still closed in the red. The Dow dipped 46.92 points or 0.3 percent to 13,880.62, the Nasdaq fell 32.92 points or 1 percent to 3,131.49 and the S&P 500 slid 9.53 points or 0.6 percent to 1,502.42.
The lower close on Wall Street came as traders continued to cash in on the recent strength in the markets, which lifted the major averages to multi-year closing highs on Tuesday.
Concerns about the outlook for monetary stimulus from the Federal Reserve also weighed on stocks along with disappointing reports on weekly jobless claims and Philadelphia manufacturing activity.
Before the start of trading, the Labor Department released a report showing that initial jobless claims climbed to 362,000 in the week ended February 16th, an increase of 20,000 from the previous week's revised figure of 342,000.
Economists had been expecting jobless claims to rise to 359,000 from the 341,000 originally reported for the previous week.
Separately, the Philadelphia Federal Reserve said its index of current activity fell to a negative 12.5 in February from a negative 5.8 in January, with a negative reading indicating a contraction in regional manufacturing activity.
The drop by the Philly Fed index came as a surprise to economists, who had been expecting the index to climb to a positive 1.1. With the unexpected decrease, the Philly Fed Index fell to its lowest level since hitting a negative 12.8 in June of 2012.
On the other hand, the National Association of Realtors released a report showing that existing home sales saw a modest rebound in January.
NAR said existing home sales rose 0.4 percent to a seasonally adjusted annual rate of 4.92 million in January after falling 1.2 percent to a downwardly revised 4.90 million in December.
Among individual stocks, Wal-Mart (WMT) rose by 1.5 percent after the retail giant reported better than expected fourth quarter earnings but noted that U.S. sales got off to a slow start in February due largely to a delay in tax refund checks.
Many of the major sectors climbed well off their worst levels of the day, although significant weakness remained visible among electronic storage stocks. The NYSE Arca Disk Drive Index fell by 2.1 percent to its worst closing level in well over a month.
NetApp (NTAP) and Seagate Technology (STX) turned in two of the storage sector's worst performances, falling by 2.8 percent and 2.4 percent, respectively.
Brokerage stocks also posted steep losses on the day, resulting in a 1.9 percent drop by the NYSE Arca Broker/Dealer Index. The index added to the 1.6 percent posted on Wednesday, pulling back further off Tuesday's one-year closing high.
Steel, networking, and semiconductor stocks also saw considerable weakness on the day, moving to the downside along with most of the major sectors.
On the other hand, gold stocks regained some ground after falling sharply in recent sessions. The NYSE Arca Gold Bugs Index surged up by 1.4 percent, bouncing off its worst closing level in over three years.
In overseas trading, stock markets across the Asia-Pacific region came under pressure on Thursday on the heels of the overnight weakness on Wall Street. Japan's Nikkei 225 Index dropped by 1.4 percent, while Hong Kong's Hang Seng Index plummeted by 1.7 percent.
The major European markets also showed substantial moves to the downside. While the U.K.'s FTSE 100 Index tumbled by 1.6 percent, the German DAX Index and the French CAC 40 Index plunged by 1.9 percent and 2.3 percent, respectively.
In the bond market, treasuries saw considerable strength after ending the previous session nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.5 basis points to 1.976 percent.
Amid a lack of major U.S. economic data, trading on Friday may be impacted by reaction to quarterly results from Hewlett-Packard (HPQ). The tech giant is releasing its fiscal first quarter results after the close of today's trading.
by RTT Staff Writer
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