WASHINGTON (dpa-AFX) - Stocks have moved sharply lower over the course of the trading day on Thursday, with the major averages all showing significant moves to the downside after once again failing to sustain an initial move to the upside.
Currently, the major averages are just off their lows of the session. The Dow is down 496.77 points or 1.0 percent at 49,624.63, the Nasdaq is down 341.43 points or 1.5 percent at 22,725.04 and the S&P 500 is down 68.04 points or 1.0 percent at 6,873.43.
The sell-off on Wall Street partly reflects renewed weakness among tech stocks amid a steep drop by shares of Cisco Systems (CSCO).
Cisco is plunging by 10.7 percent after the networking giant reported better than expected fiscal second quarter results but provided disappointing guidance for the current quarter.
Partly reflecting the nosedive by Cisco, the NYSE Arca Networking Index has tumbled by 3.0 percent on the day.
Transportation stocks have also shown a substantial move to the downside, dragging the Dow Jones Transportation Average down by 5.1 percent.
A sharp decline by the price of gold is also contributing to significant weakness among gold stocks, as reflected by the 3.9 percent slump by the NYSE Arca Gold Bugs Index.
Financial, biotechnology and oil service stocks are also seeing considerable weakness, while telecom and utilities stocks are bucking the downward trend.
On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits dipped by less than expected last week.
The report said initial jobless claims slipped to 227,000, a decrease of 5,000 from the previous week's revised level of 232,000.
Economists had expected jobless claims to fall to 220,000 from the 231,000 originally reported for the previous week.
The National Association of Realtors also released a report showing existing home sales pulled back by much more than expected in the month of January.
The focus now shifts to the Labor Department's report on consumer price inflation that is due to be released before the start of trading on Friday.
'Forecasts suggest the critical core CPI measure could ease to around 2.5%, marking a near five-year low,' said Daniela Hathorn, Senior Market Analyst at Capital.com. 'If inflation comes in line with - or ideally below - expectations, the strength of the labor market may become secondary.'
She added, 'A softer inflation print would keep rate cuts firmly priced in and could restore upward momentum in risk assets.'
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. South Korea's Kospi spiked by 3.1 percent, while Hong Kong's Hang Seng Index slid by 0.9 percent and Japan's Nikkei 225 Index closed marginally lower.
The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is down by 0.6 percent, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.5 percent.
In the bond market, treasuries have moved back to the upside, offsetting the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.7 basis points at 4.125 percent.
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