Nasdaq Sharply Lower In Afternoon Trading But Dow Remains Positive

wallstreet sept17 16dec21 lt

While the tech-heavy Nasdaq has moved sharply lower during trading on Thursday, the Dow continues to see moderate strength in afternoon trading. The S&P 500 has joined the Nasdaq in negative territory after climbing within striking distance of a new record intraday high.

Currently, the Dow is well off its best levels of the day but still up 98.68 points or 0.3 percent at 36,026.11. Meanwhile, the Nasdaq is down 291.51 points or 1.9 percent at 15,247.07 and the S&P 500 is down 21.35 points or 0.5 percent at 4,688.50.

The mixed performance by the major averages comes as traders continue to digest the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

The Fed announced its widely expected decision to accelerate the pace of tapering its asset purchases and forecast as many as three interest rate hikes next year.

While some stocks continue to benefit from reduced uncertainty about the outlook for monetary policy, high-growth tech stocks are partly offsetting yesterday's rally amid concerns about the impact of higher interest rates.

Traders are also reacting to a slew of U.S. economic data, including a Labor Department report showing a modest rebound in first-time claims for unemployment benefits in the week ended December 11th.

The Labor Department said initial jobless claims rose to 206,000, an increase of 18,000 from the previous week's revised level of 188,000.

Economists had expected jobless claims to inch up to 195,000 from the 184,000 originally reported for the previous week.

The slightly bigger than expected increase came after jobless claims fell to their lowest level since 1969 in the previous week.

The Fed also released a report showing U.S. industrial production increased by less than expected in the month of November.

The report said industrial production rose by 0.5 percent in November after surging by an upwardly revised 1.7 percent in October.

Economists had expected industrial production to climb by 0.7 percent compared to the 1.6 percent jump originally reported for the previous month.

A separate report from the Commerce Department showed housing starts and building permits both surged by much more than expected in the month of November.

Meanwhile, the Philadelphia Federal Reserve released a report showing a substantial slowdown in the pace of growth in regional manufacturing activity in December.

Sector News

Semiconductor and software stocks have moved sharply lower on the day contributing to the steep drop by the tech-heavy Nasdaq.

Reflecting the weakness in the sectors, the Philadelphia Semiconductor Index is down by 3.8 percent and the Dow Jones U.S. Software Index is down by 2.9 percent.

Considerable weakness has also emerged among retail stocks, as reflected by the 1.7 percent drop by the Dow Jones U.S. Retail Index.

On the other hand, gold stocks continue to see significant strength in afternoon trading, with the NYSE Arca Gold Bugs Index soaring by 4.1 percent after ending the previous session at a two-month closing low.

The rebound by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for February delivery surging $33.70 to $1,798.20 an ounce.

Steel stocks also continue to turn in a strong performance on the day, moving notably higher along wit oil, banking and telecom stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index spiked by 2.1 percent, while China's Shanghai Composite Index advanced by 0.8 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index surged by 1.3 percent, the French CAC 40 Index and the German DAX Index jumped by 1.1 percent and 1 percent, respectively.

In the bond market, treasuries have moved higher over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3 basis points at 1.433 percent.

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