WASHINGTON (dpa-AFX) - Extending the sharp pullback seen late in the previous session, stocks have moved significantly lower in morning trading on Thursday. With the steep drop, the major averages have tumbled to their lowest intraday levels in over a moth.
Currently, the major averages are just off their lows of the session. The Dow is down 369.36 points or 1.4 percent at 25,597.97, the Nasdaq is down 134.96 points or 1.7 percent at 7,808.36 and the S&P 500 is down 38.06 points or 1.3 percent at 2,841.36.
The sell-off on Wall Street reflects renewed trade concerns following tough talk from President Donald Trump ahead of two days of U.S.-China trade talks in Washington.
Trump claimed during a rally in Florida on Wednesday that the U.S. is planning to raise tariffs on Chinese goods because China 'broke the deal.'
'So they're flying in, the vice premier tomorrow is flying in - good man - but they broke the deal,' Trump told his supporters. 'They can't do that, so they'll be paying.'
The comments from Trump come as Chinese Vice Premier Liu He is set to take part in the latest round of trade talks as officials from the world's two largest economies attempt to reach an historic trade agreement.
Analysts have previously urged investors to focus on Trump's actions rather than his words, suggesting that the president's bluster is merely a negotiating tactic.
On the U.S. economic front, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened in the month of March.
The report said the trade deficit widened to $50.0 billion in March from a revised $49.3 billion in February. Economists had expected the deficit to widen to $50.2 billion.
The wider trade deficit came as the value of imports surged up by 1.1 percent to $262.0 billion compared to a 1.0 percent jump in the value of exports to $212.0 billion.
The Labor Department also released a report showing producer prices increased in line with economist estimates in the month of April.
The report said producer price index for final demand rose by 0.2 percent in April after climbing by 0.6 percent in March. The uptick in prices matched expectations.
Excluding food and energy prices, core producer prices inched up by 0.1 percent in April after rising by 0.3 percent in March. Economists had expected core prices to edge up by 0.2 percent.
A separate Labor Department report showed first-time claims for U.S. unemployment benefits pulled back by less than expected in the week ended May 4th.
The Labor Department said initial jobless claims dipped to 228,000, a decrease of 2,000 from the previous week's unrevised level of 230,000. Economists had expected jobless claims to drop to 220,000.
Shortly after the start of trading, the Commerce Department is scheduled to release its report on wholesale inventories in the month of March. Wholesale inventories are expected to be unchanged.
Stocks moved modestly higher over the course of the trading session on Wednesday but pulled back sharply going into the close. The volatility on the day came on the heels of the steep drop seen on Tuesday.
Semiconductor stocks have shown a substantial move to the downside in morning trading, dragging the Philadelphia Semiconductor Index down by 3.3 percent to its lowest intraday level in over a month.
Industry giant Intel (INTC) is leading the sector lower after BMO Capital downgraded its rating on the company's stock to Market Perform from Outperform.
Networking, computer hardware, energy, and biotechnology stocks are also seeing considerable weakness amid broad based selling pressure.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slid by 0.9 percent, while Hong Kong's Hang Seng Index plunged by 2.4 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.8 percent, the German DAX Index and the French CAC 40 Index are down by 1.5 percent and 1.8 percent, respectively.
In the bond market, treasuries have shown a significant rebound following the pullback in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.7 basis points at 2.425 percent.
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