U.S. Stocks Come Under Pressure After Seeing Initial Strength

After moving to the upside in early trading on Thursday, stocks have come under pressure over the course of the morning. The major averages have all pulled back off their highs of the session and into negative territory.

The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 148.25 points or 0.4 percent at 33,743.10, the Nasdaq is down 184.21 points or 1.3 percent at 13,567.81 and the S&P 500 is down 27.73 points or 0.6 percent at 4,358.81.

The pullback on Wall Street comes as traders cash in on the rally seen in the previous session amid lingering concerns about the impact of the Russian invasion of Ukraine.

A week after Russia launched an all-out invasion of Ukraine, Russian forces have stepped up their attacks, forcing thousands of Ukrainians to flee the country.

Traders remain worried the sanctions imposed on Russia along with the subsequent surge in oil prices could derail the economic recovery even as the Federal Reserve prepares to begin raising interest rates.

Fed Chair Jerome Powell is appearing before the Senate Banking Committee this morning and reiterated the central bank is likely to raise rates by at least 25 basis points at its meeting later this month.

On the U.S. economic front, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended February 26th.

The report showed initial jobless claims dipped to 215,000, a decrease of 18,000 from the previous week’s revised level of 233,000.

Economists had expected jobless claims to edge down to 225,000 from the 232,000 originally reported for the previous week.

The release of the report comes a day ahead of the release of the Labor Department’s more closely watched report on employment in the month of February.

Economists currently expect employment to jump by 400,000 jobs in February after surging by 467,000 jobs in January, while the unemployment rate is expected to edge down to 3.9 percent from 4.0 percent.

Meanwhile, a separate report from the Institute for Supply Management unexpectedly showed a continued slowdown in the pace of growth in U.S. service sector activity in the month of February.

The ISM said its services PMI fell to 56.5 in February from 59.9 in January. While a reading above 50 still indicates growth in the service sector, economists had expected the index to inch up to 61.0.

The services PMI decreased for the third straight month after reaching a record high of 68.4 in November of 2021.

Airline stocks have moved sharply lower over the course of the morning, dragging the NYSE Arca Airline Index down by 2.8 percent to its lowest intraday level in a month.

Considerable weakness has also emerged among semiconductor stocks, as reflected by the 2.5 percent slump by the Philadelphia Semiconductor Index.

Industry giant Intel (INTC) is posting a notable loss after Morgan Stanley downgraded its rating on the company’s stock to Underweight from Equal-Weight.

Tobacco, financial, and biotechnology stocks have also come under pressure on the day, while some strength is visible among utilities stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while Hong Kong’s Hang Seng Index climbed by 0.6 percent.

Meanwhile, the major European markets have shown significant moves to the downside on the day. While the U.K.’s FTSE 100 Index has plunged by 1.9 percent, the German DAX Index is down by 1.5 percent and the French CAC 40 Index is down by 1.1 percent.

In the bond market, treasuries have shown a lack of direction over the course of the morning. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.873 percent.

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