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Stocks See Further Downside On Renewed Trade Worries - U.S. Commentary

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After moving mostly lower early in the session, stocks have seen further downside over the course of the trading session on Thursday. The major averages have slid firmly into negative territory, adding to the modest losses posted in the previous session.

Currently, the major averages are off their worst levels but still posting steep losses. The Dow is down 327.86 points or 1.3 percent at 25,062.44, the Nasdaq is down 115.18 points or 1.6 percent at 7,260.10 and the S&P 500 is down 37.12 points or 1.4 percent at 2,694.49.

Renewed concerns about a U.S.-China trade deal generated additional selling pressure after a report from CNBC said President Donald Trump and Chinese President Xi Jinping are "highly unlikely" to meet before a March 2nd deadline,

A senior administration official told CNBC that Trump and Xi may still meet "shortly" after the deadline, when tariffs on Chinese goods are currently set to jump automatically.

The report from CNBC comes after White House economic adviser Larry Kudlow told Fox Business the U.S. and China have a "pretty sizable distance to go" before reaching a trade deal.

Worries about the U.S.-China trade talks added to early concerns about the global economy after the European Commission lowered its eurozone growth forecast.

The European Commission slashed its GDP growth forecast for 2019 to 1.3 percent from 1.9 percent and lowered its estimate for growth in 2020 to 1.6 percent from 1.7 percent.

The downgrade reflected external factors, such as trade tensions and the slowdown in emerging markets, notably in China.

Officials warned that the European outlook faces substantial risks due to the uncertainty about Brexit and the slowdown in China.

A steep drop by shares of Twitter (TWTR) is also weighing on the markets after the social media giant reported better than expected fourth quarter results but forecast a jump in expenses this year.

Sector News

Energy stocks have moved sharply lower over the course of the trading session amid a steep drop by the price of crude oil. Crude for March delivery is tumbling $2.13 to $51.88 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 5.5 percent, the NYSE Arca Natural Gas Index is down by 3.4 percent and the NYSE Arca Oil Index is down by 2.6 percent.

Significant weakness has also emerged among semiconductor stocks, as reflected by the 2.8 percent slump by the Philadelphia Semiconductor Index. The index is pulling back off its best closing level in four months.

Computer hardware, biotechnology, and chemical stocks have also moved notably lower amid broad based weakness on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, with markets in Hong Kong and mainland China still closed for holidays. Japan's Nikkei 225 Index fell by 0.6 percent, while Australia's S&P/ASX 200 Index jumped by 1.1 percent.

Meanwhile, the major European markets all moved notably lower over the course of the session. While the German DAX Index plunged by 2.7 percent, the French CAC 40 Index tumbled by 1.8 percent and the U.K.'s FTSE 100 Index slumped by 1.1 percent.

In the bond market, treasuries have moved to the upside after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.8 basis points at 2.664 percent.

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