Plus   Neg

U.S. Stocks Remain Firmly Negative After Early Sell-Off


After coming under pressure early in the session, stocks continue to see significant weakness in mid-day trading on Thursday. The major averages have climbed off their worst levels of the day but remain firmly in negative territory.

Currently, the major averages continue to post steep losses. The Dow is down 372.21 points or 1.4 percent at 25,595.12, the Nasdaq is down 98.96 points or 1.3 percent at 7,844.36 and the S&P 500 is down 32.68 points or 1.1 percent at 2,846.74.

The sell-off on Wall Street reflects renewed trade concerns following tough talk from President Donald Trump ahead of two days of U.S.-China trade talks in Washington.

Trump claimed during a rally in Florida on Wednesday that the U.S. is planning to raise tariffs on Chinese goods because China "broke the deal."

"So they're flying in, the vice premier tomorrow is flying in — good man — but they broke the deal," Trump told his supporters. "They can't do that, so they'll be paying."

The comments from Trump come as Chinese Vice Premier Liu He is set to take part in the latest round of trade talks as officials from the world's two largest economies attempt to reach an historic trade agreement.

Analysts have previously urged investors to focus on Trump's actions rather than his words, suggesting that the president's bluster is merely a negotiating tactic.

On the U.S. economic front, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened in the month of March.

The report said the trade deficit widened to $50.0 billion in March from a revised $49.3 billion in February. Economists had expected the deficit to widen to $50.2 billion.

The wider trade deficit came as the value of imports surged up by 1.1 percent to $262.0 billion compared to a 1.0 percent jump in the value of exports to $212.0 billion.

The Labor Department also released a report showing producer prices increased in line with economist estimates in the month of April.

The report said producer price index for final demand rose by 0.2 percent in April after climbing by 0.6 percent in March. The uptick in prices matched expectations.

Excluding food and energy prices, core producer prices inched up by 0.1 percent in April after rising by 0.3 percent in March. Economists had expected core prices to edge up by 0.2 percent.

A separate Labor Department report showed first-time claims for U.S. unemployment benefits pulled back by less than expected in the week ended May 4th.

The Labor Department said initial jobless claims dipped to 228,000, a decrease of 2,000 from the previous week's unrevised level of 230,000. Economists had expected jobless claims to drop to 220,000.

Sector News

Networking stocks have moved sharply lower over the course of the session, dragging the NYSE Arca Networking Index down by 2.5 percent. Earlier in the session, the index hits its lowest intraday level in over a month.

Significant weakness also remains visible among semiconductor stocks, as reflected by the 2.4 percent slump by the Philadelphia Semiconductor Index.

Intel (INTC) is posting a steep loss after BMO Capital downgraded its rating on the semiconductor giant to Market Perform from Outperform. After hitting a three-month low, Intel is down by 5.1 percent.

Computer hardware, chemical, and steel stocks also continue to see considerable weakness, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slid by 0.9 percent, while Hong Kong's Hang Seng Index plunged by 2.4 percent.

The major European markets also showed significant moves to the downside on the day. While the U.K.'s FTSE 100 Index slumped by 0.9 percent, the German DAX Index and the French CAC 40 Index tumbled by 1.7 percent and 1.9 percent, respectively.

In the bond market, treasuries have pulled back off their best levels but continue to see notable strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.8 basis points at 2.444 percent.

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