Stocks have moved sharply lower during trading on Thursday, extending the pullback seen in the previous session. The major averages have all shown significant moves to the downside on the day.
In recent trading, the major averages have fallen to new lows for the session. The Dow is down 493.92 points or 1.4 percent at 33,794.72, the Nasdaq is down 216.45 points or 1.6 percent at 13,575.20 and the S&P 500 is down 60.74 points or 1.4 percent at 4,386.08.
The sell-off on Wall Street comes as a batch of largely upbeat U.S. economic data has added to concerns about the outlook for interest rates.
Before the start of trading, payroll processor ADP released a report showing much stronger than expected private sector job growth in the month of June.
ADP said private sector employment spiked by 497,000 jobs in June after jumping by a downwardly revised 267,000 jobs in May.
Economists had expected private sector employment to increase by 228,000 jobs compared to the addition of 278,000 jobs originally reported for the previous month.
While the surge in private sector employment paints a positive picture of the economy, continued strength in the labor market may convince the Federal Reserve to resume raising interest rates.
The Fed, which is due to announce its next interest rate decision later this month, has previously warned about the impact of labor market tightness.
The Institute for Supply Management also released a report showing the pace of growth in the service sector accelerated by much more than expected in June.
The ISM said its services PMI climbed to 53.9 in June from 50.3 in May, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 51.0.
Sector News
Airline stocks are turning in some of the market’s worst performances on the day, with the NYSE Arca Airline Index plummeting by 3.7 percent.
JetBlue (JBLU) is posting a steep loss after saying it would follow a judge’s order to end its partnership with American Airlines (AAL) in the Northeast in an effort to salvage its planned $3.8 billion acquisition of Spirit Airlines (SAVE).
Substantial weakness is also visible among banking stocks, as reflected by the 2.9 percent slump by the KBW Bank Index.
Oil stocks have also shown a significant move to the downside amid a decrease by the price of crude oil, dragging the NYSE Arca Oil Index down by 2.8 percent.
Steel, housing and semiconductor stocks are also seeing considerable weakness on the day, moving lower along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index tumbled by 1.7 percent, while Hong Kong’s Hang Seng Index plummeted by 3.0 percent.
The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index has plunged by 3.2 percent, the German DAX Index is down by 2.6 percent and the U.K.’s FTSE 100 Index is down by 2.3 percent.
In the bond market, treasuries have plummeted in reaction to the upbeat U.S. economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 11.6 basis points at 4.061 percent.
Business News
U.S. Stocks Move Sharply Lower As Data Adds To Interest Rate Worries
2023-07-06 15:19:21
