Dow Climbing To New Record High But Nasdaq Remains Sharply Lower

After moving sharply lower early in the session, the tech-heavy Nasdaq continues to post a steep loss in mid-day trading on Thursday. The S&P 500 has climbed off its worst levels but also remains in the red, while the narrower Dow has moved steadily higher.

In recent trading, the Dow has seen further upside, reaching a new record intraday high. The blue chip index is currently up 192.90 points or 0.6 percent at 33,208.27, while the Nasdaq is down 184.71 points or 1.4 percent at 13,340.49 and the S&P 500 is down 10.09 points or 0.3 percent at 3,964.03.

The continued advance by the Dow is partly due to strong gains by financial giants JPMorgan Chase (JPM) and Goldman Sachs (GS), which are jumping by 4.2 percent and 3.3 percent, respectively.

Meanwhile, the steep drop by the Nasdaq comes as a continued surge in treasury yields has renewed concerns about the outlook for high-growth companies.

The yield on the benchmark ten-year note has jumped above 1.7 percent to reach its highest levels since last January, while the thirty-year bond yield has shot up to its highest levels since last summer.

Yields are skyrocketing despite yesterday’s assurances by the Federal Reserve that interest rates will remain at near-zero levels through 2023.

Analysts have attributed the jump in yields to concerns that the Fed’s apparent willingness to let inflation accelerate more than normal will reduce the appeal of bonds. Yields move in the opposite direction of bond prices.

In U.S. economic news, the Labor Department released a report showing an unexpected increase in first-time claims for U.S. unemployment benefits in the week ended March 13th.

The report said initial jobless claims climbed to 770,000, an increase of 45,000 from the previous week’s revised level of 725,000.

The rebound came as a surprise to economists, who had expected jobless claims to edge down to 700,000 from the 712,000 originally reported for the previous week.

However, the unexpected increase in jobless claims was partly due to jump in claims in Texas due to the impact of Winter Storm Uri.

A separate report released by the Philadelphia Federal Reserve showed its reading on regional manufacturing activity spiked to a nearly 50-year high in March.

Sector News

Software stocks continue to turn in some of the market’s worst performances in mid-day trading, resulting in a 2.2 percent slump by the Dow Jones U.S. Software Index.

Semiconductor and computer hardware stocks also continue to see considerable weakness, contributing to the steep drop by the tech-heavy Nasdaq.

Notable weakness also remains visible among oil stocks, as reflected by the 1.9 percent drop by the NYSE Arca Oil Index.

The weakness in the oil sector comes amid a steep drop by the price of crude oil, with crude for April delivery plunging $2.67 to $61.93 a barrel.

On the other hand, banking stocks have moved sharply higher over the course of the session, driving the KBW Bank Index up by 3.8 percent to a new record intraday high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index jumped by 1 percent, while China’s Shanghai Composite Index climbed by 0.5 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has surged up by 1.3 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are up by 0.3 percent and 0.2 percent, respectively.

In the bond market, treasuries continue to see substantial weakness after gapping open sharply lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 9.2 basis points at 1.733 percent.