Shutterstock photo(RTTNews.com) - Following the modest strength seen in the previous session, stocks moved sharply lower over the course of the trading day on Thursday. With the sell-off on the day, the S&P 500 dropped to its lowest closing level in over a month.
The major averages ended the session at their worst levels of the day. The Dow tumbled 274.14 points or 1.2 percent to 21,750.73, the Nasdaq plummeted 123.19 points or 1.9 percent to 6,211.91 and the S&P 500 slumped 38.10 points 1.5 percent to 2,430.01.
The broad based weakness on Wall Street reflected concerns about ongoing political turmoil in Washington, D.C.
Reports that Gary Cohn is considering resigning as Trump's top economic advisor weighed on Wall Street, although the White House has denied the claims.
Cohn, former president and chief operating officer of Goldman Sachs (GS), currently serves as the Director of the National Economic Council.
"Nothing has changed," a White House official said. "Gary is focused on his responsibilities as NEC Director and any reports to the contrary are 100% false."
Cohn was reportedly "upset" and "disgusted" with Trump's remarks indicating blame for the clashes between white supremacists and counter-protesters should be shared by both sides.
Traders also reacted negatively to the latest batch of earnings news, with Wal-Mart (WMT) and Cisco Systems (CSCO) moving lower after reporting their quarterly results.
On the U.S. economic front, the Labor Department released a report showing a bigger than expected drop in initial jobless claims in the week ended August 12th.
The report said initial jobless claims dropped to 232,000, a decrease of 12,000 from the previous week's unrevised level of 244,000. Economists had expected jobless claims to edge down to 240,000.
A separate report from the Philadelphia Federal Reserve showed a modest slowdown in the pace of growth in regional manufacturing activity in the month of August.
The Philly Fed Index edged down to 18.9 in August from 19.5 in July, although a positive reading still indicates growth in regional manufacturing activity. The index has been expected to dip to 18.5.
Meanwhile, the Federal Reserve released a report showing industrial production rose by slightly less than expected in the month of July.
The report said industrial production edged up by 0.2 percent in July after climbing by 0.4 percent in June. Economists had expected production to rise by 0.3 percent.
Sector News
Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 3.2 percent. With the steep drop, the index fell to a five-month closing low.
The sell-off by airline stocks may reflect concerns about the impact a terrorist attack in Barcelona that killed at least 12 people will have on air travel.
Considerable weakness was also visible among computer hardware, as reflected by the 2.8 percent slump by the NYSE Arca Computer Hardware Index. NetApp (NTAP) led the sector lower after providing disappointing guidance.
Semiconductor, steel, railroad, and telecom stocks also showed significant moves to the downside on the day, reflecting broad based weakness on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index edged down by 0.1 percent, while China's Shanghai Composite Index climbed by 0.7 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index fell by 0.5 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both slid by 0.6 percent.
In the bond market, treasuries moved higher over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.7 basis points to 2.199 percent.
Looking Ahead
Trading on Friday may be impacted by reaction to the University of Michigan's preliminary report on consumer sentiment in the month of August. The consumer sentiment index is expected to inch up to 94.0 in August from 93.4 in July.
On the earnings front, Gap (GPS), Applied Materials ( AMAT ) and Ross Stores (ROST) are among the companies releasing their quarterly results after the close of today's trading.
Deere (DE), Estee Lauder (EL) and Foot Locker (FL) are also due to release their results before the start of trading on Friday.
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