After closing higher for three straight sessions, the tech-heavy Nasdaq has shown a substantial move to the downside during trading on Thursday. The S&P 500 has also moved lower on the day, while the narrower Dow is posting a modest gain.
Currently, the Nasdaq is down 217.18 points or 1.4 percent at 14,971.21, although it remains well off the nearly three-month intraday low set on Monday. While the S&P 500 is also down 29.02 points or 0.6 percent at 4,697.33, the Dow is up 52.46 points or 0.1 percent at 36,342.78.
The sharp pullback by the Nasdaq comes as traders cash in on some of the recent strength seen in the tech sector over the past few days.
Tech stocks got off to a rocky start in the New Year amid concerns about higher interest rates but regained some ground over the past few days.
Today’s subsequent sell-off suggests some traders remain wary about making big bets on tech stocks ahead of likely interest rate hikes in the near future.
Software stocks have shown a particularly steep drop on the day, dragging the Dow Jones U.S. Software Index down by 2.8 percent.
Tech-related Dow components Salesforce.Com (CRM) and Microsoft (MSFT) are posting notable losses, although a strong gain by Boeing (BA) has helped to support the blue chip index.
Boeing is currently up by 3.3 percent after a report from Bloomberg said the 737 Max could resume service in China as soon as this month.
Traders are also digesting another reading on U.S. inflation, with a report from the Labor Department showing only a slight uptick in U.S. producer prices in the month of December.
The Labor Department said its producer price index for final demand edged up by 0.2 percent in December after jumping by an upwardly revised 1.0 percent in November.
Economists had expected producer prices to rise by 0.4 percent compared to the 0.8 percent increase originally reported for the previous month.
The report also showed the annual rate of producer growth slowed to 9.7 percent in December from a record high 9.8 percent in November.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index slumped by 1 percent, while Australia’s S&P/ASX 200 Index rose by 0.5 percent.
The major European markets also ended the day mixed. While the French CAC 40 Index fell by 0.5 percent, the German DAX Index crept up by 0.1 percent and the U.K.’s FTSE 100 Index edged up by 0.2 percent.
In the bond market, treasuries have shown a lack of direction over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.722 percent.
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