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Dow Moving Sharply Lower Amid Steep Drop By 3M - U.S. Commentary

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After initially moving in opposite directions, stocks have moved mostly lower over the course of morning trading on Thursday. The Dow has shown a notable move to the downside after flirting with a new record intraday high in the previous session.

Currently, the Dow is down 244.03 points or 0.9 percent at 26,353.02. The S&P 500 is also down 8.67 points or 0.3 percent at 2,918.58, while the Nasdaq is lingering near the unchanged line, up 1.00 point or less than a tenth of a percent at 8,103.01.


A steep drop by shares of 3M (MMM) is weighing on the Dow, with the diversified manufacturer plunging by 10.5 percent in morning trading.

The sell-off by 3M comes after the company reported weaker than expected first quarter results and lowered its full-year guidance.

On the other hand, jumps by shares of Facebook (FB) and Microsoft (MSFT) are helping to support the tech-heavy Nasdaq.

The social media giant and the software giant are up by 6.1 percent and 3.8 percent, respectively, after both reported quarterly results that exceeded analyst estimates on both the top and bottom lines.

Traders are also digesting a mixed batch of U.S. economic data ahead of the release of closely watched first quarter GDP data on Friday.

The Commerce Department released a report showing durable goods orders jumped by much more than expected in the month of March, reflecting a significant rebound in orders for transportation equipment,

The report said durable goods orders surged up by 2.7 percent in March after tumbling by a revised 1.1 percent in February.

Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.6 percent slump originally reported for the previous month.

Excluding the spike in orders for transportation equipment, durable goods orders rose by 0.4 percent in March after edging down by a revised 0.2 percent in February.

Ex-transportation orders had been expected to inch up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the Labor Department released a separate report showing initial jobless claims rebounded by more than anticipated in the week ended April 20.

The Labor Department said initial jobless claims climbed to 230,000, an increase of 37,000 from the previous week's revised level of 193,000. Economists had expected jobless claims to rise to 200,000.

The bigger than expected increase came after the number of jobless claims in the previous week represented their lowest level since hitting 182,000 in September of 1969.

Networking stocks have shown a substantial move to the downside in morning trading, dragging the NYSE Arca Networking Index down by 2.6 percent. The index is pulling back off an eighteen-year closing high.

Netgear (NTGR) is leading the networking sector lower after reporting better than expected first quarter results but providing disappointing second quarter guidance.

Considerable weakness has also emerged among housing stocks, as reflected by the 2.2 percent slump by the Philadelphia Housing Sector Index. The index ended the previous session at its best closing level in nine months.

Homebuilder D.R. Horton (DHI) is also posting a steep loss after reporting fiscal second quarter results that exceeded analyst estimates but providing disappointing full-year guidance.

Tobacco, transportation, and semiconductor stocks are also seeing significant weakness on the day, while Microsoft is leading the software sector sharply higher.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index slumped by 0.9 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has slid by 0.8 percent, the French CAC 40 Index is down by 0.7 percent and the German DAX Index is down by 0.6 percent.

In the bond market, treasuries are showing a lack of direction after moving notably higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up less than a basis point at 2.529 percent.

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