Major Averages Finish Extremely Volatile Session In Negative Territory

Following the sell-off seen in the previous session, stocks saw substantial volatility during trading on Thursday. The major averages showed wild swings over the course of the session before closing in negative territory.

While the Nasdaq dipped 29.66 points or 0.3 percent to 11,388.50, the Dow and the S&P 500 once again ended the session at their lowest closing levels in over a year. The Dow slid 236.94 points or 0.8 percent at 31,253.13 and the S&P 500 fell 22.89 points or 0.6 percent to 3,900.79.

The volatility on the day came as traders continued to debate when the markets will reach a bottom, with the S&P 500 closing in on bear market territory.

The S&P 500 ended the day down by 18.7 percent compared to January’s record closing high, just of the 20 percent decline that signals a bear market.

Networking stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 2.9 percent to its lowest closing level in over a year.

Significant weakness was also visible among tobacco stocks, as reflected by the 2.6 percent slump by the NYSE Arca Tobacco Index.

Computer hardware and transportation stocks also saw considerable weakness, with the NYSE Arca Computer Hardware Index and the Dow Jones Transportation Average falling by 1.9 percent and 1.8 percent, respectively.

On the other hand, gold stocks moved sharply higher on the day, resulting in a 5.4 percent spike by the NYSE Arca Gold Bugs Index. The rally came as gold for June delivery surged $25.30 to $1,841.20 an ounce.

In U.S. economic news, a report released by the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended May 14th.

The report showed initial jobless claims rose to 218,000, an increase of 21,000 from the previous week’s revised level of 197,000.

Economists had expected jobless claims to edge down to 200,000 from the 203,000 originally reported for the previous week.

Existing home sales showed a significant decrease in the month of April, according to a report released by the National Association of Realtors on Thursday.

NAR said existing home sales tumbled 2.4 percent to an annual rate of 5.61 million in April after plunging by 3.0 percent to a revised rate of 5.75 million in March. Economists had expected existing home sales to decrease by 0.7 percent.

With the bigger than expected slump, existing home sales dropped to their lowest annual rate since June of 2020.

A separate report from the Federal Reserve Bank of Philadelphia showed a significant slowdown in the pace of growth in regional manufacturing activity.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slumped by 1.9 percent, while Hong Kong’s Hang Seng Index dove by 2.5 percent.

The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index plunged by 1.8 percent, the French CAC 40 Index tumbled by 1.3 percent and the German DAX Index slid by 0.9 percent.

In the bond market, treasuries gave back ground after an early upward move but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.855 percent.

Looking ahead, trading activity may be somewhat subdued on Friday amid a lack of major U.S. economic data.