Tech Stocks Lead Sharp Pullback On Wall Street

(RTTNews) - Stocks moved sharply lower over the course of the trading day on Thursday, largely offsetting the rebound seen in the previous session. With the pullback on the day, the Nasdaq and the S&P 500 fell to their lowest closing levels in a month.

The major averages all moved to the downside on the day, although the Dow posted a relatively modest loss, dipping 113.36 points or 0.3 percent to 34,451.23. The Nasdaq plunged 292.51 points or 2.1 percent to 13,351.08, and the S&P 500 slumped 54.00 points or 1.2 percent to 4,392.59.

For the holiday-shortened week, the Dow slid by 0.8 percent, while the Nasdaq plummeted by 2.6 percent and the S&P 500 tumbled by 2.1 percent.

Tech stocks helped lead the way lower, as reflected by the steep drop by the tech-heavy Nasdaq. The weakness in the sector came amid a substantial rebound by treasury yields, with the yield on the ten-year note reaching its highest closing level since December 2018.

Treasury yields soared following the release of a slew of U.S. economic data, including a report from the Commerce Department showing U.S. retail sales increased in March amid a spike in sales by gas stations.

The report showed retail sales rose by 0.5 percent in March after climbing by an upwardly revised 0.8 percent in February.

Economists had expected retail sales to increase by 0.6 percent compared to the 0.3 percent uptick originally reported for the previous month.

Excluding a pullback in sales by motor vehicle and parts dealers, retail sales jumped by 1.1 percent in March after rising by 0.6 percent in February. Ex-auto sales were expected to increase by 1.0 percent.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits increased by more than expected in the week ended April 9th.

The Labor Department said initial jobless claims rose to 185,000, an increase of 18,000 from the previous week's revised level of 167,000.

Economists had expected initial jobless claims to edge up to 171,000 from the 166,000 originally reported for the previous week.

The Labor Department also released a report showing U.S. import prices surged by more than expected in the month of March, as prices for fuel imports continued to skyrocket. Meanwhile, preliminary data released by the University of Michigan unexpectedly showed a substantial improvement in U.S. consumer sentiment in the month of April.

The report showed the consumer sentiment index spiked to 65.7 in April from 59.4 in March. The sharp increase surprised economists, who had expected the index to edge down to 59.0.

The consumer sentiment index rebounded from its lowest level since August 2011 amid an improvement in consumer expectations, with the expectations index surging to 64.1 in April from 54.3 in Mach.

Sector News

Semiconductor stocks turned in some of the market's worst performances on the day, dragging the Philadelphia Semiconductor Index down by 2.9 percent to its lowest closing level in almost eleven months.

Significant weakness was also visible among networking and computer hardware stocks, with the NYSE Arca Networking Index and the NYSE Arca Computer Hardware Index falling by 1.9 percent and 1.7 percent, respectively.

Within the hardware sector, Western Digital (WDC) and Seagate Technology (STX) posted notable losses after Susquehanna Financial downgraded its ratings on both disk drive makers.

Retail stocks also came under pressure over the course of the session, resulting in a 1.5 percent drop by the Dow Jones U.S. Retail Index.

Banking and housing stocks also saw notable weakness, while oil service stocks bucked the downtrend amid a sharp increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both jumped by 1.2 percent, while Hong Kong's Hang Seng Index climbed by 0.7 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index advanced by 0.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index rose by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries pulled back sharply after regaining ground over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, spiked 14.1 basis points to a new three-year closing high of 2.828 percent.

Looking Ahead

While the markets will be closed on Friday, the Federal Reserve is still scheduled to release its report on industrial production in the month of March.

Following the long weekend, traders are likely to keep an eye on reports on homebuilder confidence, housing starts, and existing home sales as well as the Fed's Beige Book.

Earnings news is also likely to be in focus, with Bank of America (BAC), Johnson & Johnson (JNJ), IBM Corp. (IBM), Procter & Gamble (PG), Tesla (TSLA), American Express (AXP) and Verizon (VZ) among a slew of companies due to report their quarterly results next week.