(RTTNews) – After recovering from an initial drop, stocks have shown a significant move back to the downside over the course of the trading session on Thursday. The major averages have pulled back firmly into negative territory after briefly tuning positive.
Currently, the major averages are off their worst levels but stuck in the red. The Dow is down 263.83 points or 0.9 percent at 29,084.19, the Nasdaq is down 141.22 points or 1.4 percent at 9,675.96 and the S&P 500 is down 31.56 points or 0.9 percent at 3,354.59.
The pullback has partly been attributed to renewed concerns about coronavirus outbreak, although it was not immediately clear what sparked the sell-off.
Semiconductor and software stocks have led the way lower, with the Philadelphia Semiconductor and the Dow Jones U.S. Software Index tumbling by 2.4 percent and 2.2 percent, respectively, after ending the previous session at record closing highs.
Significant weakness has also emerged among steel stocks, as reflected by the 1.4 percent slump by the NYSE Arca Steel Index.
Computer hardware, networking and healthcare stocks have also come under pressure, contributing to the pullback by the broader markets.
On the other hand, considerable strength remains visible among brokerage stocks, with E*Trade (ETFC) jumping by 23.5 percent after agreeing to be acquired by Morgan Stanley (MS) in an all-stock transaction valued at approximately $13 billion.
The initial weakness on Wall Street came as traders continue to keep an eye on developments regarding the coronavirus outbreak, which has contributed to some volatility on Wall Street in recent sessions.
While China reported just 394 new confirmed cases on Wednesday compared to 1,749 cases a day earlier, South Korea reported 31 new cases of the coronavirus.
The jump in confirmed cases in South Korea combined with news of the deaths of two passengers aboard a cruise ship docked in Japan led to renewed concerns about the spread of the disease.
Selling pressure waned shortly after the start of trading, however, as traders also reacted to the People’s Bank of China’s widely expected move to cut its benchmark one-year loan prime rate by 10 basis points.
The rate cut adds to a slew of fiscal and monetary measures in recent weeks aimed at mitigating the economic damage from the coronavirus outbreak.
In U.S. economic news, a released by the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended February 15th.
The Labor Department said initial jobless claims crept up to 210,000, an increase of 4,000 from the previous week’s revised level of 206,000.
Economists had expected jobless claims to inch up to 210,000 from the 205,000 originally reported for the previous week.
Meanwhile, the Philadelphia Federal Reserve released a report unexpectedly showing another substantial acceleration in the pace of growth in Philadelphia-area manufacturing activity in the month of February.
The Philly Fed said its diffusion index for current general activity skyrocketed to 36.7 in January after spiking to 17.0 in January, with a positive reading indicating growth in regional manufacturing activity.
The continued increase by the Philly Fed Index came as a surprise to economists, who had expected the index to dip to 12.0. With the unexpected jump, the Philly Fed Index reached its highest reading since February of 2017.
Shortly after the start of trading, the Conference Board released a report showing a much bigger than expected increase by its reading on leading economic indicators.
The Conference Board said its leading economic index climbed by 0.8 percent in January after falling by 0.3 percent in December. Economists had expected the index to rise by 0.3 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.3 percent, while Hong Kong’s Hang Seng Index dipped by 0.2 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the U.K.’s FTSE 100 Index fell by 0.3 percent, the French CAC 40 Index and the German DAX Index slid by 0.8 percent and 0.9 percent, respectively.
In the bond market, treasuries have moved notably higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.5 basis points at 1.515 percent.
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