Stocks have fluctuated over the course of the trading session on Thursday but have largely maintained a negative bias. The Nasdaq and the S&P 500 are adding to the steep losses posted in the previous session, falling to their lowest intraday levels in five months.
In recent trading, the major averages have fallen to new lows for the session. The Nasdaq is down 168.56 points or 1.3 percent at 12,652.66, the S&P 500 is down 30.47 points or 0.7 percent at 4,156.30 and the Dow is down 118.16 points or 0.4 percent at 32,917.77.
A negative reaction to quarterly results from Meta Platforms (META) is weighing on the Nasdaq, with the Facebook parent tumbling by 3.9 percent despite reporting third quarter results that exceeded analyst estimates on the top and bottom lines.
The weakness on Wall Street also comes following the release of a slew of U.S. economic data, including a Commerce Department report showing GDP soared by more than expected in the third quarter of 2023.
The Commerce Department said GDP spiked by 4.9 percent in the third quarter after jumping by 2.1 percent in the second quarter. Economists had expected GDP to surge by 4.2 percent.
The stronger than expected GDP growth partly reflected a surge in consumer spending, which soared by 4.0 percent in the third quarter after climbing by 0.8 percent in the second quarter.
The resilience of the U.S. economy has added to recent concerns about the Federal Reserve leaving interest rates higher for longer than investors had hoped.
“The Fed will see the third quarter’s surge in GDP as evidence that the economy is robust, and that restrictive interest rates continue to be appropriate near-term,” said Bill Adams, Chief Economist for Comerica Bank.
He added, “That means that the Fed will be on hold for a while even if inflation slows further near-term—and with gas prices down sharply in October, the next CPI report will probably be a cool one.”
The Commerce Department also released a report showing new orders for U.S. manufactured durable goods spiked by much more than expected in the month of September.
The report said durable goods orders soared by 4.7 percent in September following a revised 0.1 percent dip in August.
Economists had expected durable goods orders to jump by 1.5 percent compared to the 0.1 percent uptick that had been reported for the previous month.
Excluding orders for transportation equipment, durable goods orders climbed by 0.5 percent in September, matching the increase in August. Ex-transportation orders were expected to rise by 0.2 percent.
Meanwhile, the Labor Department released a report showing first-time claims for U.S. unemployment benefits edged higher in the week ended October 21st.
The report said initial jobless claims rose to 210,000, an increase of 10,000 from the previous week’s revised level of 200,000. Economists had expected jobless claims to rise to 208,000 from the 198,000 originally reported for the previous month.
Sector News
Computer hardware stocks are seeing considerable weakness on the day, with the NYSE Arca Computer Hardware Index tumbling by 2.4 percent.
Shares of Western Digital (WDC) have moved sharply lower after a report from the Nikkei newspaper said the company and Japan’s Kioxia Holdings have called off merger talks.
Significant weakness is also visible among oil service stocks, as reflected by the 2.2 percent slump by the Philadelphia Oil Service Index.
The weakness in the oil service sector comes as the price of crude oil for December delivery is tumbling $1.76 to $83.63 a barrel.
Software, gold and pharmaceutical stocks are also seeing notable weakness, while housing, commercial real estate and financial stocks have shown strong moves to the upside.
The rally by housing stocks comes after the National Association of Realtors released a report showing an unexpected rebound in pending home sales in the month of September.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index dove by 2.1 percent, while South Korea’s Kospi plummeted by 2.7 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 1.0 percent, the U.K.’s FTSE 100 Index is down by 0.8 percent and the French CAC 40 Index is down by 0.3 percent.
In the bond market, treasuries have moved higher despite the upbeat U.S. economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.5 basis points at 4.908 percent.
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