Dow Moving Lower For Fourth Straight Day Amid Steep Drop By Disney

After ending the previous session mostly higher, stocks have moved back to the downside in morning trading on Thursday. The major averages have all moved lower on the day, with the Dow showing a notable decline.

Currently, the major averages are just off their lows of the session. The Dow is down 342.07 points or 1.0 percent at 33,189.26, the Nasdaq is down 37.14 points or 0.3 percent at 12,269.30 and the S&P 500 is down 24.65 points or 0.6 percent at 4,112.99.

The Dow is moving lower for the fourth consecutive session, with a steep drop by shares of Disney (DIS) weighing on the blue chip index.

Disney has plunged by 8.9 percent to a nearly two-month intraday low after the entertainment giant reported fiscal second quarter earnings and revenue roughly in line with estimates but a decrease in streaming subscribers.

Renewed concerns about turmoil in the banking sector are also weighing on Wall Street amid a nosedive by shares of PacWest Bancorp (PACW).

PacWest Bancorp has plummeted by 22.1 percent after the regional bank revealed in a SEC filing that deposits slumped by 9.5 percent last week.

The weakness on Wall Street may also reflected concerns about the economy following the release of a Labor Department report showing initial jobless claims climbed to their highest level in well over a year in the week ended May 6th.

The report said initial jobless claims rose to 264,000, an increase of 22,000 from the previous week’s unrevised level of 242,000. Economists had expected jobless claims to inch up to 245,000.

With the much bigger than expected advance, jobless claims reached their highest level since hitting a matching number in the week ended October 30, 2021.

A separate Labor Department showed a continued slowdown in the annual rate of producer price growth in April, although some traders worry the slowdown is partly due to the U.S. heading for a recession.

Sector News

Oil service stocks have moved sharply lower on the day, dragging the Philadelphia Oil Service Index down by 2.9 percent to its lowest intraday level in well over a month.

The sell-off by oil service stocks comes amid a steep drop by the price of crude oil, with crude for June delivery tumbling $1.91 to $70.65 a barrel.

Concerns about the outlook for demand are also weighing on steel stocks, as reflected by the 2.4 percent slump by the NYSE Arca Steel Index. The index has fallen to a more than four-month intraday low.

Gold stocks are also seeing considerable weakness amid a decrease by the price of the precious metal, moving notably lower along banking, natural gas and commercial real estate stocks.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region closed modestly lower on Thursday, although Japan’s Nikkei 225 Index inched slightly higher. China’s Shanghai Composite Index slipped by 0.3 percent, while Hong Kong’s Hang Seng Index edged down by 0.1 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has fallen by 0.3 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.8 percent.

In the bond market, treasuries are extending yesterday’s advance following the latest inflation data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6 basis points at 3.379 percent.

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