U.S. Stocks Show Notable Pullback After Failing To Sustain Early Advance

Stocks moved mostly higher in early trading on Thursday but failed to sustain the upward move and have shown a notable downturn since then. The major averages have pulled back well off their highs of the session and firmly in negative territory.

The major averages have seen further downside in recent trading, falling to new lows for the session. The Dow is down 189.58 points or 0.6 percent at 32,608.82, the Nasdaq is down 88.15 points or 0.8 percent at 11,487.86 and the S&P 500 is down 26.52 points or 0.7 percent at 3,965.49.

The early strength on Wall Street came following the release of a report from the Labor Department showing initial jobless claims rose by more than expected in the week ended March 4th.

The report said initial jobless claims climbed to 211,000, an increase of 21,000 from the previous week’s unrevised level of 190,000. Economists had expected jobless claims to inch up to 195,000.

With the bigger than expected increase, jobless claims reached their highest level since hitting 223,000 in the week ended December 24th.

The data helped ease concerns about labor market tightness, which the Federal Reserve has pointed to as a reason for stubbornly elevated inflation.

Buying interest waned shortly after the start of trading, however, as traders look ahead to the release of the Labor Department’s more closely watched monthly jobs report on Friday.

Economists currently expect employment to jump by 203,000 jobs in February after surging by 517,000 jobs in January, while the unemployment rate is expected to hold at 3.4 percent.

“Fed Chair Powell seems to have signaled they will accelerate the tightening pace to a half-point rate rise if we get both a hot NFP and inflation reports,” said Edward Moya, senior market analyst at OANDA.

He added, “Some traders are thinking that if tomorrow delivers a not-so-hot jobs report, that we could see Fed fund futures lean towards a quarter-point rate rise for the March 22nd FOMC meeting.”

Sector News

Banking stocks have moved sharply lower over the course of the session, dragging the KBW Bank Index down by 6.5 percent to its lowest intraday level in well over two months.

Substantial weakness has also emerged among oil service stocks, as reflected by the 3.1 percent nosedive by the Philadelphia Oil Service Index.

The sell-off by oil service stocks comes amid a modest decrease by the price of crude oil, with crude for April delivery slipping $0.35 to $76.31 a barrel.

Brokerage, steel and chemical stocks have also come under pressure as the day has progressed, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while China’s Shanghai Composite Index dipped by 0.2 percent.

Meanwhile, European stocks moved mostly lower during trading on Thursday. While the German DAX Index closed nearly unchanged, the French CAC 40 Index edged down by 0.1 and the U.K.’s FTSE 100 Index slid by 0.6 percent.

In the bond market, treasuries have moved to the upside after showing a lack of direction earlier in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.7 basis points at 3.929 percent.

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