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Sell-Off Resumes, Fed Yawns At Correction -- U.S. Commentary

U.S. stocks tumbled in early dealing Thursday amid lingering anxiety over potential interest rate hikes.

Traders shrugged off some upbeat corporate earnings, and the major averages were firmly negative after an initial uptick at the start of the session.

The Dow Jones Industrial Average dropped 300 points, or 1.2 percent, to 24.595. The S&P 500 was down 25 points, or 1 percent, to 2,656 and the Nasdaq was down 73 points to 6,978.

Apple and Merck were the only Dow components in positive territory.

Central bankers say that the recent correction in U.S. stocks will have little impact on the broader economy, a sign that they still plan to raise interest rates at least three times in 2018.

"More volatility in the markets, and maybe addressing some of the excesses and imbalances in the markets, by having a little more volatility, may be a healthy thing," Federal Reserve Bank of Dallas President Robert Kaplan said in an interview with Bloomberg Television.

"I'll be watching carefully to make sure it does not transmit, though, to tighter financial conditions or spillover to the economy," he also said. "But at this point, I'd be optimistic that it won't."

In corporate news, Teva (TEVA) shares plunged 8 percent amid reports of manufacturing problems.

Twitter Inc. (TWTR) reported revenue and adjusted earnings per share for the fourth quarter beat analysts' estimates. Shares jumped 15 percent.

T-Mobile US Inc. (TMUS) revealed earnings for its fourth quarter that climbed compared to the same period last year. The bottom line rose to $2.71 billion, or $3.11 per share, up from $390 million, or $0.45 per share, in last year's fourth quarter. Revenue for the quarter rose 5.2 percent.

Yum! Brands (YUM) announced a new partnership with online and mobile takeout food-ordering company Grubhub Inc. (GRUB) to drive incremental sales to KFC and Taco Bell restaurants in the U.S. Grubhub shares rose sharply.

Asian stocks closed mostly higher on Thursday. Chinese shares fell for a third day. China's Shanghai Composite index tumbled 47.21 points or 1.43 percent to 3,262.05 while Hong Kong's Hang Seng index closed up 128.07 points or 0.42 percent at 30,451.27.

Japanese shares rose sharply. The Nikkei average rallied 245.49 points or 1.13 percent to finish at 21,890.86 while the broader Topix index closed 0.90 percent higher at 1,765.69.

European stocks were lower after the Bank of England decided to stand pat on rates this morning, but hinted at somewhat earlier- and deeper-than-expected rate hikes.

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