WASHINGTON (dpa-AFX) - Following the substantial rebound seen in the previous session, stocks have shown a significant move back to the downside in morning trading on Thursday. The pullback on the day extends the considerable volatility seen in recent sessions.
Currently, the major averages are stuck firmly in negative territory. The Dow is down 738.70 points or 2.7 percent at 26,352.16, the Nasdaq is down 178.70 points or 2 percent at 8,839.39 and the S&P 500 is down 79.19 points or 2.5 percent at 3,050.93.
Lingering concerns about the economic impact of the coronavirus outbreak have contributed to the sell-off on Wall Street, as some traders look to cash in on yesterday's strong gains.
Investors continue to monitor developments regarding the coronavirus outbreak that has now spread worldwide, as confirmed cases reach more than 95,000 globally.
Coronavirus infections in South Korea have jumped to more than 6,000, with the Korea Centers for Disease and Control and Prevention revealing that three more people died from the virus, bringing the total to 35.
Switzerland has also reported its first death from the virus, while the number of cases in Germany rose by 87 to 349. California declared a state of emergency after a coronavirus-related death in the state, where there are at least 53 confirmed cases.
In U.S. economic news, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended February 29th.
The report said initial jobless claims edged down to 216,000, a decrease of 3,000 from the previous week's unrevised level of 219,000. Economists had expected jobless claims to slip to 215,000.
Meanwhile, revised data released by the Labor Department showed U.S. labor productivity increased by less than initially estimated in the fourth quarter of 2019.
The report said labor productivity climbed by 1.2 percent in the fourth quarter compared to the previously reported 1.4 percent jump. Economists had expected the pace of productivity growth to be unrevised from the initial estimate.
The Labor Department also said unit labor costs rose by 0.9 percent in the fourth quarter, reflecting a notable downward revision from the originally reported 1.4 percent spike. The increase in labor costs was also expected to be unrevised.
A separate report from the Commerce Department showed new orders for U.S. manufactured goods pulled back by much more than expected in the month of January.
The Commerce Department said factory orders slid by 0.5 percent in January after surging up by 1.9 percent in December. Economists had expected factory orders to edge down by 0.1 percent.
On Friday, the Labor Department is scheduled to release its more closely watched employment report for the month of February.
Employment is expected to increase by about 175,000 jobs in February after jumping by 225,000 jobs in January, while the unemployment rate is expected to hold at 3.6 percent.
Banking stocks have moved sharply lower in morning trading, dragging the KBW Bank Index down by 4.5 percent to its lowest intraday level in over a year.
The sell-off by banking stocks comes as continued strength among treasuries has pushed the yield on the benchmark ten-year note further below 1 percent.
Significant weakness has also emerged among transportation stocks, as reflected by the 3.9 percent nosedive by the Dow Jones Transportation Average.
Steel, energy, brokerage and chemical stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1.1 percent, while China's Shanghai Composite Index surged up by 2 percent.
Meanwhile, the major European markets have shown substantial moves to the downside on the day. While the French CAC 40 Index has tumbled by 2 percent, the U.K.'s FTSE 100 Index is down by 1.9 percent and the German DAX Index is down by 1.7 percent.
In the bond market, treasuries are extending a recent uptrend trend, pushing the yield on the benchmark ten-year note further below 1 percent. The yield on the ten-year note, which moves opposite of its price is down by 6.7 basis points at 0.925 percent.
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