Stocks showed wild swings over the course of the trading day on Thursday, extending the volatility seen in recent sessions. The major averages bounced back and forth across the unchanged line before closing in negative territory.
The major averages all ended the day in the red, although the tech-heavy Nasdaq underperformed its counterparts. While the Nasdaq tumbled 214.08 points or 1.6 percent to 13,537.94, the Dow fell 96.69 points or 0.3 percent to 33,794.66 and the S&P 500 slid 23.05 points or 0.5 percent to 4,363.49.
The volatility on the day came as traders kept an eye on developments in Ukraine, as Russian forces continue to step up their attacks, forcing thousands of Ukrainians to flee the country.
Traders remain worried the sanctions imposed on Russia along with the subsequent surge in oil prices could derail the economic recovery even as the Federal Reserve prepares to begin raising interest rates.
Fed Chair Jerome Powell appeared before the Senate Banking Committee this morning and reiterated the central bank is likely to raise rates by at least 25 basis points at its meeting later this month.
On the U.S. economic front, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended February 26th.
The report showed initial jobless claims dipped to 215,000, a decrease of 18,000 from the previous week’s revised level of 233,000.
Economists had expected jobless claims to edge down to 225,000 from the 232,000 originally reported for the previous week.
The release of the report comes a day ahead of the release of the Labor Department’s more closely watched report on employment in the month of February.
Economists currently expect employment to jump by 400,000 jobs in February after surging by 467,000 jobs in January, while the unemployment rate is expected to edge down to 3.9 percent from 4.0 percent.
Meanwhile, a separate report from the Institute for Supply Management unexpectedly showed a continued slowdown in the pace of growth in U.S. service sector activity in the month of February.
The ISM said its services PMI fell to 56.5 in February from 59.9 in January. While a reading above 50 still indicates growth in the service sector, economists had expected the index to inch up to 61.0.
The services PMI decreased for the third straight month after reaching a record high of 68.4 in November of 2021.
Sector News
Airline stocks saw substantial weakness on the day, dragging the NYSE Arca Airline Index down by 3.3 percent to a three-month closing low.
Significant weakness was also visible among semiconductor stocks, as reflected by the 2.2 percent slump by the Philadelphia Semiconductor Index.
Industry giant Intel (INTC) posted a notable loss after Morgan Stanley downgraded its rating on the company’s stock to Underweight from Equal-Weight.
Tobacco stocks also saw considerable weakness on the day, with the NYSE Arca Tobacco Index tumbling by 2 percent.
Brokerage, housing and retail stocks also showed notable moves to the downside, while steel and utilities stocks turned in strong performances.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while Hong Kong’s Hang Seng Index climbed by 0.6 percent.
Meanwhile, the major European markets showed substantial moves to the downside on the day. While the French CAC 40 Index slumped by 1.8 percent, the German DAX Index tumbled by 2.2 percent and the U.K.’s FTSE 100 Index plunged by 2.6 percent.
In the bond market, treasuries showed a lack of direction over the course of the session before closing modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.1 basis points to 1.844 percent.
Looking Ahead
The situation in Ukraine is likely to remain on investors’ minds on Friday, although they may pay even closer attention to the monthly jobs report.
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