Global Economic Worries Lead To Sell-Off On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved sharply lower over the course of the trading day on Thursday, more than offsetting the strength seen in the previous session. With the weakness on the day, the Nasdaq pulled back well off yesterday's three-month closing high.

The major averages climbed off their worst levels going into the close but remained firmly in the red. The Dow slumped 174.09 points or 1 percent to 17,541.96, the Nasdaq plunged 72.35 points or 1.5 percent to 4,848.37 and the S&P 500 tumbled 24.75 points or 1.2 percent to 2,041.91.

The sell-off on Wall Street was partly due to concerns the outlook for global economic growth, which came amid a jump in the value of the Japanese yen versus the U.S. dollar.

The U.S. dollar has fallen by about 1.3 percent against the yen to 108.41 yen after earlier hitting its lowest level since October of 2014.

The strength shown by the yen was partly attributed to comments from Bank of Japan officials indicating that the central bank is unlikely to intervene.

A decrease by the price of crude oil also weighed on stocks, with crude for May delivery sliding $0.49 to $37.26 after soaring $1.86 to $37.75 a barrel on Wednesday.

The jump seen by the price of crude oil in the previous session came after a report showed that oil inventories tumbled by 4.9 million barrels last week.

Meanwhile, traders largely shrugged off a report from the Labor Department showing a bigger than expected drop in initial jobless claims in the week ended April 2nd.

The report said jobless claims fell to 267,000, a decrease of 9,000 from the previous week's unrevised level of 276,000. Economists had expected claims to edge down to 272,000.

A separate report from the Federal Reserve showed that consumer credit jumped by $17.2 billion in February compared to expectations for an increase of about $14.0 billion.

Sector News

Most of the major sectors came under pressure over the course of the trading session, reflecting broad based weakness on Wall Street.

Brokerage stocks showed a particularly steep drop on the day, dragging the NYSE Arca Broker/Dealer Index down by 3.4 percent. With the drop, the index fell to its lowest closing level in over a month.

Investment Technology Group (ITG) posted a steep loss after JPMorgan downgraded its rating on the company from Overweight to Neutral.

Considerable weakness was also visible among oil service stocks, which moved lower along with the price of crude oil. The Philadelphia Oil Service Index slid by 2.4 percent and also set a one-month closing low.

Biotechnology stocks also showed a substantial move back to the downside after rising sharply on Wednesday. After ending the previous session at a nearly three-month closing high, the NYSE Arca Biotechnology Index dropped by 2.3 percent.

Banking, networking, steel, and retail stocks also saw notable weakness, while gold stocks bucked the downtrend amid an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Thursday. Japan's Nikkei 225 Index edged up by 0.2 percent, while China's Shanghai Composite Index slumped by 1.4 percent.

Meanwhile, the major European markets all came under pressure on the day. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index and the German DAX Index dropped by 0.9 percent and 1 percent, respectively.

In the bond market, treasuries showed a strong move back to the upside after ending the previous session in the red. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.4 basis points to a nearly two-month closing low of 1.691 percent.

Looking Ahead

Later today, Federal Reserve Chair Janet Yellen is scheduled to participate in a conversation with former Fed chairs Ben Bernanke, Alan Greenspan and Paul Volcker.

Any significant remarks from the panel discussion could impact trading on Friday amid a relatively quiet day on the U.S. economic front.

The Commerce Department is due to release its report on wholesale trade in the month of February, but the data does not typically impact the markets.