While stocks moved sharply lower at the start of trading on Thursday, selling pressure waned not long after the open. The markets have subsequently seen a notable recovery attempt, as some traders look to pick up stocks at reduced levels.
The major averages have climbed well off their worst levels but are currently still posting modest losses. The Dow is down 5.12 points or less than a tenth of a percent at 15,302.05, the Nasdaq is down 5.59 points or 0.2 percent at 3,457.71 and the S&P 500 is down 5.55 points or 0.3 percent at 1,649.80.
The sell-off seen at the start of trading reflected lingering concerns about the Federal Reserve scaling back its asset purchase program as well as disappointing Chinese manufacturing data.
In Congressional testimony on Wednesday, Fed Chairman Ben Bernanke acknowledged that upbeat economic data could lead the central bank to taper its asset purchase program in the next few meetings.
Adding to the worries, the minutes of the latest Fed meeting said a number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting.
Meanwhile, a report released by Markit Economics and HSBC showed that Chinese manufacturing activity unexpectedly contracted in May.
The report showed that the purchasing managers index fell to 49.6 in May from 50.4 in April, with a reading below 50 indicating a contraction. Economists had expected the index to remain unchanged.
Nonetheless, stocks did not see much follow-through on the initial downward move, as traders still seemed reluctant to sell stocks.
The subsequent recovery attempt by the markets was partly due to the release of a report from the Commerce Department showing that new home sales came in well above economist estimates in the month of April.
The Commerce Department said new home sales climbed 2.3 percent to a seasonally adjusted annual rate of 454,000 in April from the revised March rate of 444,000.
Economists had expected new home sales to rise to an annual rate of 425,000 compared to the 417,000 originally reported for the previous month, reflecting a 1.9 percent increase.
Before the start of trading, the Labor Department released a separate report showing a bigger than expected drop in weekly jobless claims in the week ended May 18th.
Sector News
Despite the recovery attempt by the broader markets, significant weakness remains visible among commercial real estate stocks. The Morgan Stanley REIT Index is down by 1.7 percent, pulling back further off Tuesday's five-year high.
Omega Healthcare Investors (OHI) and Universal Health Realty Income Trust (UHT) are turning in two of the real estate sector's worst performances.
Steel stocks also remain under pressure in mid-day trading, with the NYSE Arca Steel Index down by 1.3 percent. The weakness in the sector comes as the disappointing Chinese manufacturing data has raised concerns about the outlook for global steel demand.
Utilities, railroad, and brokerage stocks also continue to see notable weakness, although selling pressure has waned from earlier in the session.
Meanwhile, computer hardware stocks have shown a strong move to the upside on the day, driving the NYSE Arca Computer Hardware Index up by 2.4 percent. With the gain, the index has reached its best intraday level in a year.
Hewlett-Packard (HPQ) has helped to lead the hardware sector higher, with the PC giant jumping by 13.6 percent after reporting better than expected second quarter earnings and raising its full-year guidance.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Thursday. Japan's Nikkei 225 Index plummeted by 7.3 percent, while Hong Kong's Hang Seng Index tumbled by 2.5 percent.
The major European markets also showed notable moves to the downside on the day. The U.K.'s FTSE 100 Index, the French CAC 40 Index and the German DAX Index all dropped by 2.1 percent.
In the bond market, treasuries have moved modestly lower over the course of the session after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.6 basis points at 2.042 percent.
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Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.