Profit Taking Contributes To Pullback On Wall Street

Stocks showed a notable move to the downside during trading on Thursday, giving back ground following the rally seen over the course of the previous session.

The major averages all ended the day firmly in negative territory. The Dow tumbled 288.14 points or 1.2 percent to 24,345.72, the Nasdaq fell 25.16 points or 0.3 percent to 8,889.55 and the S&P 500 slumped 27.08 points or 0.9 percent to 2,912.43.

Profit taking contributed to the weakness on Wall Street, with traders cashing in on the strong upward move seen in recent sessions.

The rally seen in the previous session lifted the major averages to their best closing levels in well over a month.

The pullback by stocks also came following the release of some disappointing U.S. economic data.

Personal income in the U.S. tumbled by more than expected in the month of March, according to a report released by the Commerce Department on Thursday.

The report said personal income plunged by 2.0 percent in March after climbing by 0.6 percent in February. Economists had expected personal income to slump by 1.5 percent.

The Commerce Department said personal spending also plummeted by 7.5 percent in March after inching up by 0.2 percent in the previous month. Spending was expected to nosedive by 5.0 percent.

A separate report released by the Labor Department on Thursday showed a notable decrease in first-time claims for U.S. unemployment benefits in the week ended April 25th, although claims remain at a significantly elevated level.

The Labor Department said initial jobless claims tumbled to 3.839 million, a decrease of 603,000 from the previous week’s revised level of 4.442 million.

Economists had expected jobless claims to drop to 3.500 million from the 4.427 million originally reported for the previous week.

Steel stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Steel Index down by 5.5 percent.

Considerable weakness was also visible among banking stocks, as reflected by the 3.8 percent slump by the KBW Bank Index.

Energy, gold and semiconductor stocks also saw significant 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 surged up by 2.1 percent, while China’s Shanghai Composite Index jumped by 1.3 percent.

Meanwhile, the major European markets moved sharply lower on the day. While the U.K.’s FTSE 100 Index plummeted by 3.5 percent, the German DAX Index and the French CAC 40 Index tumbled by 2.2 percent and 2.1 percent, respectively.

In the bond market, treasuries ended the day little changed after an early move to the upside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 0.622 percent.

Reports on manufacturing activity and construction spending may attract some attention during trading on Friday.

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