U.S. Stocks Move Sharply Lower, Dow Pulls Back Off Record Closing High

Stocks have moved sharply lower in morning trading on Thursday after closing mixed for two consecutive sessions. The major averages have slid firmly into negative territory, with the Dow pulling back off yesterday’s record closing high.

The major averages have climbed off their worst levels in recent trading but continue to post steep losses. The Dow is down 246.08 points or 0.8 percent at 31,366.94, the Nasdaq is down 201.58 points or 1.4 percent at 13,763.91 and the S&P 500 is down 35.97 points or 0.9 percent at 3,895.36.

A negative reaction to earnings news from Walmart (WMT) has contributed to the sell-off on Wall Street, with the retail giant plunging by 5.5 percent.

The steep drop by Walmart comes after the company reported weaker than expected fourth quarter earnings and warned of slowing sales growth in the coming year.

The weakness on Wall Street also comes following the release of a Labor Department report showing initial jobless claims came in well above economist estimates in the week ended February 13th, with claims rising from a significantly upwardly revised level.

The report said initial jobless claims edged up to 861,000, an increase of 13,000 from the previous week’s revised level of 848,000.

Economists had expected jobless claims to dip to 765,000 from the 793,000 originally reported for the previous week.

Traders have recently viewed disappointing jobs data as positive for the markets amid expectations it will put further pressure on lawmakers to pass additional stimulus.

However, traders may now see the prospect of more stimulus as priced into the markets, inspiring them to use the data to cash in on the recent strength in the markets.

A separate report from the Commerce Department showed housing starts pulled back by much more than expected in the month of January.

The Labor Department also released a report showing a bigger than expected jump in import prices, which may have added to recent inflation concerns.

Energy stocks have shown a substantial move to the downside, as the price of crude oil has turned lower over the course of the morning. Crude for March delivery is sliding $0.59 to $60.55 a barrel.

Reflecting the sell-off in the energy sector, the Philadelphia Oil Service Index is down by 4.3 percent, the NYSE Arca Natural Gas Index is down by 2.3 percent and the NYSE Arca Oil Index is down by 2 percent.

Considerable weakness is also visible among brokerage stocks, as reflected by the 1.7 percent slump by the NYSE Arca Broker/Dealer Index. The index is pulling back further off the record closing high set on Tuesday.

Semiconductor, biotechnology and airline 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 dipped by 0.2 percent, while Hong Kong’s Hang Seng Index tumbled by 1.6 percent.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has plunged by 1.7 percent, the French CAC 40 Index is down by 0.7 percent and the German DAX Index is down by 0.3 percent.

In the bond market, treasuries are showing a lack of direction after ending the previous session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.302 percent.