U.S. Stocks Move Mostly Lower After Early Volatility
Stocks initially showed a lack of direction during trading on Thursday but have moved mostly lower over the course of the morning. With the downward move, the major averages are adding to the modest losses posted in the previous session.
The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 263.88 points or 0.9 percent at 30,009.99, the Nasdaq is down 95.47 points or 0.9 percent at 11,053.16 and the S&P 500 is down 34.87 points or 0.9 percent at 3,748.41.
The weakness that has emerged on Wall Street comes as traders continue to express concerns about the outlook for interest rates and the impact higher rates will have on the economy.
A continued rebound by treasury yields is also weighing on the markets, with the yield on the benchmark ten-year note extended the sharp upward move seen on Wednesday.
Traders are also looking ahead to the release of the Labor Department’s closely watched monthly employment report on Friday.
Economists currently expect employment to jump by 250,000 jobs in September after surging by 315,000 jobs in August, while the unemployment rate is expected to hold at 3.7 percent.
However, Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics, said, “Any easing of labor market conditions will be welcome by the Fed but won’t change the FOMC’s plans to continue to raise rates in an effort to bring down inflation.”
“The labor market should still be characterized as tight, with the ratio of job openings to unemployed workers still elevated in August despite a small decline,” she added.
As the monthly jobs report looms, the Labor Department released a separate report this morning showing first-time claims for U.S. unemployment benefits rebounded by more than expected in the week ended October 1st.
The report said initial jobless claims climbed to 219,000, an increase of 29,000 from the previous week’s revised level of 190,000. Economists had expected jobless claims to inch up to 200,000 from the 193,000 originally reported for the previous week.
The revised figure for the previous week reflects the lowest number of jobless claims since the week ended April 23rd.
Interest rate-sensitive utilities and commercial real estate stocks are leading the way lower on Wall Street, with the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index slumping by 2.6 percent and 2.1 percent, respectively.
Considerable weakness is also visible among airline stocks, as reflected by the 1.8 percent drop by the NYSE Arca Airline Index.
Banking, telecom and steel stocks have also shown notable moves to the downside, moving lower along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while Hong Kong’s Hang Seng Index slid by 0.4 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index has fallen by 0.6 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both down by 1.1 percent.
In the bond market, treasuries are extending the sharp pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.9 basis points at 3.838 percent.
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