By Anora Mahmudova and Sara Sjolin, MarketWatch
Jobless claims drop sharply, wages tick up
A U.S. stock market selloff accelerated in late trade Thursday,
with the Dow industrials dropping more than 200 points, weighed
down by hefty losses in biotechnology and technology sectors.
Read: Biotechs undercut key support level
(http://www.marketwatch.com/story/biotechs-undercut-key-support-level-2015-04-30)
The main indexes were on track to finish the month marginally
higher.
A number of economic releases and earnings reports already had
been driving stocks lower, a day after the Federal Reserve left
open the possibility of an interest rate hike as early as June.
Brian Fenske, head of sales trading at New York-based brokerage
firm, said days like this remind investors that markets do not
always go in one direction," he said.
"It is probably a combination of events and some earnings over
the past few days that has sparked a selloff. Big moves in currency
and commodity markets have played a role as did disappointing
earnings from Yelp and Twitter," Fenske offered.
The S&P 500 (SPX) fell 24 points, or 1.1%, to 2,082.89 with
all 10 main sectors trading lower. Utilities, tech and health-care
stocks were hit the hardest. The Dow Jones Industrial Average (DJI)
dropped 211 points, or 1.2%, to 17,825.37.
Taking the worst of the beaten Thursday was the Nasdaq Composite
(RIXF), which sank about 84 points, or 1.7%, to 4,941.62, with
biotechnology stocks driving the index south. The iShares Nasdaq
Biotechnology index ETF (IBB) dropped 3.4% and was down more than
8% from its peak reached last Thursday.
Fenske took some comfort in the view selling hasn't been
frenetic. "This selling is not frenzied, it's just a regular down
day, which is normal in equity markets," he added.
Thursday's economic data came in above expectations and pointed
to improvement in the labor market and further inflation
stabilization - both are key gauges of U.S.economic health that the
central bank said it would use to help guide its hand as it aims to
start normalizing interest rates.
Channing Smith, managing director at Capital Advisors, said
recent fluctuations in currency and bond markets have created
confusion for equity investors.
"Treasury yields have risen over the past week or so and the
euro strengthened rapidly, something that is not quite explainable.
Those unusual moves spooked investors, by creating uncertainty,"
Smith said.
He also pointed to very high valuations despite falling
earnings, but said eventually stock prices have to reconcile with
the global and domestic economic situation, which is experiencing a
slowdown.
(http://www.marketwatch.com/storyno-meta-for-guid)Data:The
number of people who applied for U.S. unemployment benefits
(http://www.marketwatch.com/story/us-jobless-claims-sink-to-15-year-low-2015-04-30)fell
34,000 to 262,000 in the seven days from April 19 to April 25, the
lowest level in 15 years.
The cost of employing the average U.S. worker
(http://www.marketwatch.com/story/wages-pick-up-in-the-first-quarter-2015-04-30)climbed
0.7% in the first quarter.
Consumer spending rose a seasonally adjusted 0.4% in March
(http://www.marketwatch.com/story/consumer-spending-shows-limited-advance-in-march-2015-04-30).
But personal income was flat last month, likely reflecting slower
job creation. Inflation, as gauged by the PCE price index, climbed
0.2% in March.
The Chicago PMI jumped in April to a reading of 52.3 from 46.3
in March, to return above the 50-mark signaling expansion. A
double-digit gain in the new orders component led to the
advance.
Earnings: Reporting ahead of the bell, Exxon MobilCorp.(XOM)
posted better-than-expected profit and sales but the integrated oil
giant's results still show signs of the plunge in oil prices.
Shares fell 0.5%.
Another energy company, ConocoPhillips (COP), reported an
adjusted first-quarter loss of 18 cents, slightly bigger than what
was forecast. Shares were off slightly.
After the bell, American International Group
Inc.(AIG)LinkedInCorp.(LNKD) and Visa Inc. (V) are set to report.
Read about what's expected
(http://www.marketwatch.com/story/new-york-times-exxon-aig-linkedin-fireeye-earnings-in-focus-2015-04-30).
Shares of Yelp Inc.(YELP) dropped 24% after disappointing
quarterly results.
For more news on Thursday stock movers and shakers please read
here (http://www.marketwatch.com/storyno-meta-for-guid).
Other markets: Asian stock markets closed mostly lower
(http://www.marketwatch.com/storyno-meta-for-guid), while European
benchmarks (http://www.marketwatch.com/storyno-meta-for-guid) were
mixed.
Crude-oil prices (CLM5) moved slightly higher
(http://www.marketwatch.com/storyno-meta-for-guid) and most metals
declined. The dollar (DXY) traded mixed against other major
currencies (http://www.marketwatch.com/storyno-meta-for-guid).
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