After showing a lack of direction earlier in the session, stocks have moved mostly lower over the course of the trading day on Thursday. A disappointing reading on service sector activity is weighing on the markets along with lingering concerns about Europe.
The major averages have moved to the downside in recent trading, with the Nasdaq and the S&P 500 hitting new lows for the session. The Dow is down 45.82 points or 0.4 percent at 13,222.75, the Nasdaq is down 27.69 points or 0.9 percent at 3,032.16 and the S&P 500 is down 7.42 points or 0.5 percent at 1,394.89.
The weakness that has emerged on Wall Street is partly due to the release of a report from the Institute for Supply Management showing an unexpected slowdown in the pace of service sector growth in the month of April.
The ISM said its non-manufacturing index dropped to 53.5 in April from 56.0 in March, although a reading above 50 indicates continued growth in the service sector. The drop surprised economists, who had expected the index to come in unchanged.
"Respondents' comments affirm the slowing rate of growth," said Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee. "In addition, they remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs."
Traders have also reacted negatively to comments from European Central Bank President Mario Draghi, who said that the euro area faces economic uncertainty despite signs of stabilization in the first quarter.
"The economic outlook continues to be subject to downside risks," Draghi said while speaking at a press conference following the ECB's announcement of its decision to leave interest rates unchanged.
Meanwhile, the markets have largely shrugged off the release of a Labor Department report showing a bigger than expected drop in initial jobless claims in the week ended April 28th, with traders looking ahead to the release of the more closely watched monthly jobs report on Friday.
The weekly report showed that jobless claims fell to 365,000 from the previous week's revised figure of 392,000. Economists had expected jobless claims to dip to 378,000 from the 388,000 originally reported for the previous week.
Among individual stocks, Green Mountain Coffee (GMCR) is posting a steep loss after the specialty coffee company reported second quarter earnings in line with estimates but slashed its full year guidance.
Auto giant General Motors (GM) is also trading lower despite reporting first quarter adjusted earnings that exceeded analyst estimates. GM said its revenues for the quarter rose 4 percent. A strong performance in North America helped to offset losses in Europe.
Meanwhile, shares of Kensey Nash (KNSY) have moved sharply higher on the heels of news that the medical device company agreed to be acquired by Royal DSM for about $360 million. The deal values Kensey Nash at $38.50 per share.
Sector News
Considerable weakness is visible among health insurance stocks, as reflected by the 5.2 percent loss being posted by the Morgan Stanley Healthcare Payor Index. With the loss, the index has fallen to its lowest intraday level in almost four months.
Among health insurance stocks, Health Net (HNT) posting a substantial loss after reporting weaker than expected first quarter results and cutting its full-year guidance. Shares of Health Net are down by 28.9 percent after hitting a six-month intraday low earlier in the session.
Gold stocks also continue to see significant weakness on the day, with the NYSE Arca Gold Bugs Index down by 3.8 percent. The weakness in the sector comes amid a notable decrease by the price of the precious metal, with gold for June delivery sliding $17.30 to $1,636.70 an ounce.
Electronic storage, internet, semiconductor, and brokerage stocks have also come under pressure, while modest strength remains visible among railroad and airline stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday, although the markets in Japan were closed for a public holiday. Hong Kong's Hang Seng Index fell by 0.3 percent, while Australia's All Ordinaries Index ended the day down by 0.2 percent.
Meanwhile, the major European markets turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index crept up by 0.2 percent, the French CAC 40 Index edged down by 0.1 percent and the German DAX Index slipped 0.2 percent.
In the bond market, treasuries have climbed back near the unchanged line after seeing early weakness. The yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.921 percent after reaching a high of 1.956 percent.
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