U.S. Stocks Move Mostly Lower Amid Renewed Economic Worries
(RTTNews) - Stocks have moved mostly lower in morning trading on Thursday, extending the sharp pullback seen late in the previous session. The tech-heavy Nasdaq has shown a particularly steep drop, offsetting the strong gains posted earlier this week.
The major averages have climbed off their lows of the session but currently remain stuck in the red. The Dow is down 99.79 points or 0.4 percent at 27,932.59, the Nasdaq is down 117.34 points or 1.1 percent at 10,933.13 and the S&P 500 is down 22.23 points or 0.7 percent at 3,363.26.
The weakness on Wall Street comes as stocks are extending the sell-off seen on Wednesday after the Federal Reserve revealed plans to leave interest rates at near-zero levels for years to come.
The Fed's dovish monetary policy announcement was expected to help calm the markets, although investors seem to be viewing the central bank's projections as a sign the recovery will not be as swift as many were hoping.
In his post-meeting press conference, Fed Chair Jerome Powell cautioned that the pace of the economic recovery is expected to slow and urged for fiscal stimulus from Congress to sustain the recovery.
However, lawmakers have remained at an impasse over a new coronavirus stimulus bill for weeks, and the upcoming elections could make reaching a compromise more difficult.
Negative sentiment was also generated in reaction to a report from the Labor Department showing first-time claims for U.S. unemployment benefits fell less than expected in the week ended September 12th.
The Labor Department said initial jobless claims slipped to 860,000, a decrease of 33,000 from the previous week's revised level of 893,000.
Economists had expected jobless claims to dip to 850,000 from the 884,000 originally reported for the previous week.
The Commerce Department also released a report showing new residential construction pulled back by much more than expected in the month of August.
The report said housing starts tumbled by 5.1 percent to an annual rate of 1.416 million in August after soaring by 17.9 percent to a revised rate of 1.492 million in July.
Economists had expected housing starts to pullback by 1.2 percent to a rate of 1.478 million from the 1.496 million originally reported for the previous month.
The Labor Department said building permits also fell by 0.9 percent to an annual rate of 1.470 million in August after spiking by 17.9 percent to a revised rate of 1.483 million in July.
Building permits, an indicator of future housing demand, had been expected to increase by 1.7 percent to a rate of 1.520 million from the 1.495 million originally reported for the previous month.
A separate report from the Federal Reserve Bank of Philadelphia showed a modest slowdown in the pace of growth in regional manufacturing activity.
Gold stocks have moved sharply lower in morning trading, with a steep drop by the price of the precious metal weigh on the sector.
With gold for December delivery plunging $21.20 to $1,949.30 an ounce, the NYSE Arca Gold Bugs Index has tumbled by 2.1 percent.
The disappointing housing starts data is also contributing to considerable weakness among housing stocks, as reflected by the 1.7 percent drop by the Philadelphia Housing Sector Index.
Semiconductor, software and retail stocks are also seeing significant weakness, moving lower along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index declined by 0.7 percent, while China's Shanghai Composite Index fell by 0.4 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slid by 0.7 percent, the German DAX Index is down by 0.5 percent and the U.K.'s FTSE 100 Index is down by 0.3 percent.
In the bond market, treasuries are seeing modest strength after closing nearly flat for three straight sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 0.664 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.