(RTTNews) - Stocks moved notably lower over the course of the trading day on Thursday after turning in a mixed performance in the previous session. Disappointing jobs data weighed on the markets along with continued worries about Europe.
The major averages moved roughly sideways going into the close of trading, stuck firmly in negative territory. The Dow fell 115.30 points or 0.9 percent to 13,057.46, the Nasdaq slid 20.27 points or 0.7 percent to 3,053.40 and the S&P 500 slid 11.41 points or 0.8 percent to 1,402.08.
The weakness on Wall Street was partly due to the release of a report from the Labor Department showing an unexpected increase in initial jobless claims in the week ended August 18th.
The report showed that initial jobless claims edged up to 372,000 from the previous week's revised figure of 368,000. The modest increase came as a surprise to economists, who had expected jobless claims to slip to 365,000 from the 366,000 originally reported for the previous week.
Disappointing earnings news from Hewlett-Packard (HPQ) also weighed on the markets, with the PC giant plunging by 8.2 percent.
While HP reported fiscal third quarter adjusted earnings that exceeded estimates, the company reported a steep net loss for the quarter due to a hefty goodwill impairment charge as well as restructuring and other costs. The company also forecast full-year earnings at the low end of its previously provided outlook.
The release of results from HP came on the heels of a negative reaction to quarterly results from rival Dell (DELL), which fell by 5.4 percent on Wednesday and lost another 3.8 percent today.
Worries about the financial situation in Europe also helped to drag stocks lower, with traders keeping a close eye on a meeting between German Chancellor Angela Merkel and French President Francois Hollande.
In remarks to reporters ahead of the meeting, both Merkel and Hollande urged Greece to stick to crucial reforms in order to remain a part of the eurozone.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a bigger than expected rebound in new home sales in the month of July.
The Commerce Department said new home sales rose 3.6 percent to an annual rate of 372,000 in July, while economists had expected sales to reach an annual rate of 362,000.
Among individual stocks, shares of Big Lots (BIG) fell sharply after the broadline closeout retailer reported weaker than expected second quarter earnings and cut its full-year guidance. Big Lots tumbled by 20.8 percent to its lowest closing price in a year.
Apparel retailer Guess (GES) also posted a steep loss after reporting second quarter earnings that missed estimates and warning of weaker than expected full-year results. Shares of Guess plummeted by 22.6 percent.
Meanwhile, shares of Hain Celestial (HAIN) surged up by 19.1 percent after the natural and organic food company reported better than expected fourth quarter earnings and announced an agreement to acquire Premier Foods Plc's portfolio of packaged grocery brands.
Sector News
With disappointing Chinese manufacturing data raising concerns about global steel demand, steel stocks posted particularly steep losses on the day. Reflecting the weakness in the steel sector, the NYSE Arca Steel Index tumbled by 2.8 percent.
U.S. Steel (X) and A.M. Castle (CAS) turned in two of the steel sector's worst performances, falling by 6.9 percent and 5.6 percent, respectively.
Natural gas stocks also saw significant weakness, dragging the NYSE Arca Natural Gas Index down by 2.2 percent. Southwestern Energy (SWN) and Ultra Petroleum (UPL) posted notable losses.
Considerable weakness was also visible among airline stocks, as reflected by the 2.1 percent loss posted by the NYSE Arca Airline Index. Computer hardware, chemical and defense stocks also fell sharply amid broad based selling pressure.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday amid optimism about further stimulus. Japan's Nikkei 225 Index advanced by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 1.2 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index closed just above the unchanged line, the French CAC 40 Index and the German DAX Index fell by 0.8 percent and 1 percent, respectively.
In the bond market, treasuries moved notably higher, extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.3 basis points to 1.666 percent.
Looking Ahead
Trading on Friday could be impacted by the release of the Commerce Department's monthly report on durable goods orders. Economists expect orders to increase by 1.9 percent in July following a 1.6 percent increase in June.
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