Nasdaq Continues To Post Steep Loss But Dow Turns Positive

(RTTNews) - After coming under pressure early in the session, stocks have regained ground over the course of the trading day on Thursday. The major averages have climbed well off their worst levels, although the tech-heavy Nasdaq continues to post a steep loss.

Currently, the Nasdaq is down 130.45 points or 0.9 percent at 13,742.02 and the S&P 500 is down 11.90 points or 0.3 percent at 4,453.58. Meanwhile, the narrower Dow has climbed into positive territory and is currently up 88.51 points or 0.3 percent at 34,531.70.

The early weakness on Wall Street partly reflected ongoing concerns about the outlook for interest rates following recent economic data.

A report released by the Institute for Supply Management on Wednesday unexpectedly showed faster service sector growth as well as an acceleration in price growth in the sector.

Adding to the interest rate concerns, the Labor Department released a report this morning showing an unexpected decrease in first-time claims for U.S. unemployment benefits in the week ended September 2nd.

The report said initial jobless claims fell to 216,000, a decrease of 13,000 from the previous week's revised level of 229,000.

Economists had expected jobless claims to rise to 234,000 from the 228,000 originally reported for the previous week.

Jobless claims decreased for the fourth consecutive week, falling to their lowest level since a matching figure in the week ended February 11th.

"The claims data are a reminder that labor market conditions may be cooling, but the labor market is still tight," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

She added, "The claims figures don't change our view for the Fed to keep policy steady at its meeting later this month, but more moderation in job growth will be needed to keep rate hikes permanently off the table."

While the Fed is still widely expected to leave interest rates unchanged at its next meeting later this month, CME Group's FedWatch Tool indicates a 43.4 percent chance of another rate hike in November.

Selling pressure has waned over the course of the session, however, with some traders believing recent weakness has been overdone.

Nonetheless, a steep drop by shares of Apple (AAPL) continues to weigh on the Nasdaq, with the tech giant tumbling by 3.3 percent on the day.

The slump by Apple comes after a report from Bloomberg News said China plans to expand a ban on the use of iPhones in sensitive departments to government-backed agencies and state companies.

Sector News

Computer hardware stocks continue to see substantial weakness in afternoon trading, resulting in a 2.9 percent nosedive by the NYSE Arca Computer Hardware Index.

Significant weakness also remains visible among semiconductor stocks, as reflected by the 2.2 percent slump by the Philadelphia Semiconductor Index.

Steel stocks are also seeing considerable weakness following weak Chinese trade data, dragging the NYSE Arca Steel Index down by 1.6 percent.

Networking, airline and banking stocks are also seeing continued weakness, while pharmaceutical and utilities stocks have shown strong moves to the upsided. Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index slumped by 0.8 percent, while China's Shanghai Composite Index dove by 1.1 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index closed just above the unchanged line and the U.K.'s FTSE 100 Index rose by 0.2 percent.

In the bond market, treasuries have moved modestly higher over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 4.272 percent.