While stocks saw significant weakness throughout much of the trading day on Thursday, the markets staged a significant recovery attempt in the final hour of trading. The major averages climbed well off their worst levels of the day but still closed in negative territory.
The tech-heavy Nasdaq underperformed its counterparts, ending the session down 25.83 points or 0.9 percent at 2,849.49. The Dow edged down 24.75 points or 0.2 percent to 12,602.26, while the S&P 500 slipped 2.81 points or 0.2 percent to 1,329.04.
Lingering concerns about the financial situation in Europe contributed to the early weakness on Wall Street along with a negative reaction to the Supreme Court's decision to uphold President Obama's healthcare reform law, including the law's individual insurance mandate.
In the landmark ruling, the court upheld nearly all of the healthcare reform law, only limiting the federal government's ability to terminate states' Medicaid funds.
Chief Justice John Roberts joined the liberal members of the court to uphold the individual mandate in a 5-4 vote. The court said the individual mandate would survive as a tax
However, stocks showed a strong move back to the upside in the final hour of trading following reports that German Chancellor Angela Merkel canceled a European Union summit press conference.
The news of the canceled press conference generated some optimism that the European leaders could actually reach a meaningful agreement.
Meanwhile, traders largely shrugged off the Labor Department's report on initial jobless claims in the week ended June 23rd.
The report showed that jobless claims dipped to 386,000 from the previous week's revised figure of 392,000. Economists had expected jobless claims to edge down to 385,000 from the 387,000 originally reported for the previous week.
"Bottom line, the jobs picture is still lackluster and certainly getting no help from the slowing global economy," Boockvar said.
A separate report from the Commerce Department showed that U.S. GDP increased by 1.9 percent in the first quarter, unrevised from the previous estimate and in line with the expectations of economists.
Sector News
Despite the late-day recovery attempt by the broader markets, significant weakness remained visible among biotechnology stocks. Reflecting the weakness in the biotech sector, the NYSE Arca Biotechnology Index tumbled by 2.8 percent.
Vertex (VRTX) turned in one of the biotech sector's worst performances, plunging by 16.3 percent amid a negative reaction to the data from a study testing the company's new cystic fibrosis drug.
Gold stocks also saw continued weakness, resulting in a 2.1 percent loss by the NYSE Arca Gold Bugs Index. The weakness among gold stocks came amid a sharp drop by the price of the precious metal, with gold for August delivery falling $28 to $1,550.40 an ounce.
Computer hardware, networking, and software stocks also remained stuck firmly in the red, contributing to the steep loss posted by the tech-heavy Nasdaq.
Meanwhile, healthcare provider stocks moved sharply higher following the Supreme Court ruling, driving the Morgan Stanley Healthcare Provider Index up by 3.4 percent. Health Management Associates (HMA), Universal Health Services (UHS), and Community Health Systems (CYH) posted standout gains.
Housing, commercial real estate, and health insurance stocks also moved to the upside on the day, helping to lift the markets well off their worst levels.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. While Japan's Nikkei 225 Index surged up by 1.7 percent, Hong Kong's Hang Seng Index ended the day down by 0.8 percent.
Meanwhile, the major European markets all moved to the downside. The German DAX Index tumbled by 1.3 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index fell by 0.6 percent and 0.4 percent, respectively.
In the bond market, treasuries moved notably higher on the day amid continued concerns about Europe. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.4 basis points to 1.577 percent.
Looking Ahead
While developments in Europe are likely to take center stage on Friday, trading could also be impacted by the release of U.S. reports on personal income and spending, consumer sentiment, and Chicago-area manufacturing activity.
On the earnings front, Research in Motion (RIMM) and Nike (NKE) are among the companies releasing their quarterly results after the close of today's trading.
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