(RTTNews) - After moving sharply lower early in the session, stocks continue to see notable weakness in afternoon trading on Thursday. With the pullback on the day, the major averages have largely offset the gains posted in the previous session.
The major averages have regained some ground in recent trading but currently remain firmly negative. The Dow is down 284.03 points or 0.9 percent at 32,985.74, the Nasdaq is down 94.58 points or 0.9 percent at 10,364.18 and the S&P 500 is down 30.52 points or 0.8 percent at 3,822.45.
The weakness on Wall Street comes following the release of a report from payroll processor ADP showing private sector employment in the U.S. jumped by much more than expected in the month of December.
ADP said private sector employment shot up by 235,000 jobs in December after surging by an upwardly revised 182,000 jobs in November.
Economists had expected employment to jump by about 150,000 jobs compared to the addition of 127,000 jobs originally reported for the previous month.
While the stronger than expected job growth points to continued strength in the labor market, the data has added to concerns about the outlook for interest rates.
Traders worry continued labor market tightness could encourage the Federal Reserve to continue aggressively raising interest rates in the coming months.
The Fed released the minutes of its latest monetary policy meeting on Wednesday, indicating the central bank plans to continue raising interest rates and keep rates at a restrictive level for "some time."
On Friday, the Labor Department is scheduled to release its more closely watched employment report for the month of December.
Economists currently expect employment to jump by 200,000 jobs in December after surging by 263,000 jobs in November, while the unemployment rate is expected to hold at 3.7 percent.
With the monthly jobs report looming, the Labor Department released a report this morning showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended December 31st.
The report said initial jobless claims slipped to 204,000, a decrease of 19,000 from the previous week's revised level of 223,000. Economists had expected jobless claims to come in unchanged compared to the 225,000 originally reported for the previous week.
A separate report released by the Commerce Department showed the U.S. trade deficit narrowed significantly more than expected in the month of November.
Software stocks continue to turn in some of the worst performances in afternoon trading, with the Dow Jones U.S. Software Index tumbling by 2.8 percent to a nearly two-month intraday low.
Interest rate-sensitive commercial real estate and utilities stocks are also seeing considerable weakness, dragging the Dow Jones U.S. Real Estate Index and the Dow Jones Utility Average down b y 2.2 percent and 1.6 percent, respectively.
Notable weakness also remains visible among chemical, transportation and gold stocks, while energy stocks have moved sharply higher amid a rebound by the price of crude oil.
With crude for February delivery jumping $1.32 to $74.16 a barrel, the NYSE Arca Oil Index and the Philadelphia Oil Service Index are up by 2.4 percent and 2.3 percent, respectively.
Steel and airline stocks have also shown strong moves to the upside over the course of the session, partly offsetting the weakness in the aforementioned sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index climbed by 0.6 percent, the French CAC 40 Index edged down by 0.2 percent and the German DAX Index fell by 0.4 percent.
In the bond market, treasuries have climbed back near the unchanged line after seeing early weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 3.705 percent.
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