WASHINGTON (dpa-AFX) - Stocks have moved sharply lower over the course of the trading day on Thursday, more than offsetting the rally seen in the previous session. The major averages have all shown significant moves to the downside, with the tech-heavy Nasdaq posting a particularly steep loss.
Currently, the major averages are just off their lows of the session. The Nasdaq is down 1,285.64 points or percent at 24,450.87, the S&P 500 is down 254.35 points or 3.3 percent at 7,434.27 and the Dow is down 1,210.59 points or 2.3 percent at 52,145.53.
The sharp pullback on Wall Street comes amid a sell-off in the tech sector, with the tech-heavy Nasdaq plummeting to its lowest intraday level in over six months.
Lingering concerns about the sustainability of the artificial intelligence trade continue to weigh on the tech sector.
Following Democrats' takeover of both houses of Congress in Tuesday's midterm elections, some traders are worried about the possibility of tighter AI regulation.
'Despite yesterday's relief rally on Wall Street, investors remain cautious about elevated technology valuations and whether substantial AI spending can generate sufficient returns,' said Daniela Hathorn, Senior Market Analyst at Capital.com.
Semiconductor stocks have shown a substantial move to the downside, resulting in a 10.9 percent nosedive by the Philadelphia Semiconductor Index. The index has plummeted to a nearly seven-month low.
Considerable weakness is also visible among computer hardware stocks, as reflected by the 10.3 percent plunge by the NYSE Arca Computer Hardware Index.
Outside of the tech sector, financial stocks are also seeing significant weakness, with the NYSE Arca Broker/Dealer Index tumbling by 4.2 percent and the KBW Bank Index slumping by 3.1 percent.
Airline, gold and retail stocks have also shown notable moves back to the downside, while oil producer stocks are rebounding along with the price of crude oil.
In U.S. economic news, the Labor Department released a report on Thursday showing an unexpected decline in first-time claims for U.S. unemployment benefits in the week ended October 31st.
The Labor Department said initial jobless claims fell to 189,000, a decrease of 6,000 from the previous week's revised level of 195,000.
Economists had expected jobless claims to inch up to 196,000 from the 194,000 originally reported for the previous week.
With the unexpected dip, jobless claims matched the multi-decade low of 189,000 set in the week ended July 18th.
On Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of October.
Economists currently expect employment to increase by 62,000 jobs in October after rising by 29,000 jobs in September, while the unemployment rate is expected to hold at 4.2 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. Japan's Nikkei 225 Index tumbled by 1.8 percent, while Hong Kong's Hang Seng Index soared by 3.7 percent.
The major European markets have also turned mixed on the day. While the German DAX Index is down by 0.2 percent, the U.K.'s FTSE 100 Index is just above the unchanged line and the French CAC 40 Index is up by 0.5 percent.
In the bond market, treasuries have moved to the upside over the course of the session amid the sell-off on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.5 basis points at 4.849 percent.
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