By Dan Strumpf
Stocks fell sharply and Treasurys rallied as investors sought
out assets seen as safe amid stepped-up concerns over the pace of
global economic growth.
The Dow Jones Industrial Average skidded 200 points, or 1.2%, to
17011, giving back all of the prior day's gains. The S&P 500
fell 24 points, or 1.2%, to 1975. The Nasdaq Composite Index
declined 72 points, or 1.6%, to 4483.
The S&P 500 was on track for its biggest one-day slide since
late July. Traders said no single factor was behind the slide, but
said a combination of negative economic reports in the U.S., as
well as fears of an escalation in tensions between Western
countries and Russia, have sent investors falling back on
safe-haven assets.
Meanwhile, thin trading volumes due to the Rosh Hashanah holiday
also contributed to the move, traders said.
The yield on the 10-year Treasury sank to 2.521% from 2.567%
late Wednesday. Prices move inverse to yields.
"It's a risk-off day," said Brian Fenske, head of sales trading
at brokerage ITG in New York. "If you take a step back, there's
definitely an escalation" in geopolitical tensions.
Shares of Apple took a big hit, dragging down the technology
sector and the broader Nasdaq Composite. Shares fell 3.5% after a
glitch forced the company to pull an update to its latest iPhone,
iPad and iPod software.
Stocks have bobbed higher and lower this week around their
all-time highs, as investors weigh the economic outlook for the
remainder of the year and the timeline for rate hikes by the
Federal Reserve.
"It's just a lot of movement [in the stock market] on little
bits and pieces of information one way or the other," said Keith
Bliss, senior vice president at brokerage Cuttone & Co. "I
wouldn't be surprised if we sit in this little trading range
here...'til the end of October."
The S&P 500 has gained 7.7% so far this year, though it is
faltered this week, off 1%, after hitting an all-time high of
2011.36 last Thursday.
Before the opening bell, the Labor Department said U.S. jobless
claims rose by 12,000 to 293,000 in the latest week, the Labor
Department said Thursday. Economists surveyed by The Wall Street
Journal had forecast claims to come in at 296,000.
New orders for big-ticket manufactured items fell 18.2% in
August from the prior month, outpacing the 17.5% expected decline.
At 11 a.m. EDT, investors will get a reading on regional
manufacturing activity from the Kansas City Federal Reserve.
Investors have been keeping a close eye on economic reports as
they weigh the outlook for interest-rate increases by the Federal
Reserve. The central bank is widely expected to raise rates next
year after winding down its bond-buying program in October.
On Friday, investors will get a third update on second-quarter
U.S. gross domestic product, expected to be revised upward to a
growth rate of 4.6% from a prior assessment of 4.2%.
Stocks rallied Wednesday, with gains in the S&P 500 and
Nasdaq Composite halting three straight sessions of losses.
Overseas action was dominated by further gains in the dollar.
The dollar traded at its highest level against the yen since 2008,
boosting Japanese stocks. The Nikkei Stock Average rose 1.3% to
16,374.14, turning positive for the year.
The divergence between the prospect for tighter monetary policy
in the U.S. and further easing in the eurozone continued to weigh
on the euro, which fell to $1.2724 from $1.2780 late Wednesday. The
Stoxx Europe 600 index fell 0.4%. European Central Bank President
Mario Draghi reiterated Wednesday that the central bank could use
more unconventional measures if needed to combat low inflation.
In commodity markets, crude-oil futures rose 0.2% to $92.95 a
barrel. Gold futures shed 0.5% to $1,212.70 an ounce.
Write to Dan Strumpf at daniel.strumpf@wsj.com