Stocks Close Firmly Negative But Well Off Worst Levels

Stocks climbed well off their worst levels in afternoon trading on Thursday but remained stuck firmly in negative territory. With the drop on the day, the major averages largely offset the gains posted in the previous session.

The major averages all closed lower, although the tech-heavy Nasdaq underperformed its counterparts. While the Nasdaq tumbled 90.06 points or 1.4 percent to 6,144.35, the Dow fell 167.58 points or 0.8 percent to 21,287.03 and the S&P 500 slid 20.99 points or 0.9 percent to 2,419.70.

The pullback on Wall Street was partly due to renewed weakness among technology stocks, which saw a notable rebound on Wednesday.

Semiconductor stocks showed a substantial move to the downside, dragging the Philadelphia Semiconductor Index down by 2.5 percent. The index fell to its lowest closing level in well over a month.

Infinera (INFN), ASML (ASML), and Lam Research (LRCX) turned in some of the semiconductor sector’s worst performances on the day.

Networking, computer hardware, and software stocks also saw considerable weakness, contributing to the steep drop by the tech-heavy Nasdaq.

Outside of the tech sector, gold stocks also came under pressure, with the NYSE Arca Gold Bugs Index slumping by 2.6 percent. Gold stocks moved lower along with the price of the precious metal.

On the other hand, banking saw significant strength on the day, resulting in a 1.8 percent jump by the Dow Jones Banks Index. The index reached its best closing level in over three months.

The strength among banking stocks came after the Federal Reserve approved the capital return plans of all 34 of the nation’s biggest banks as part of its annual stress test.

A number of financial giants subsequently announced dividend increases and stock buybacks, with Citigroup (C) and JP Morgan (JPM) announcing their biggest share repurchase plans on record.

Energy stocks also saw notable strength as the price of crude oil for August delivery inched up $0.19 to $44.93 a barrel, rising for the sixth straight session.

In economic news, the Commerce Department released a report showing stronger than previously estimated U.S. economic growth in the first quarter.

The report said gross domestic product climbed by 1.4 percent in the first quarter compared to the previously reported 1.2 percent increase. Economists had expected GDP growth to be unrevised.

Meanwhile, a separate report from the Labor Department showed a slight increase in initial jobless claims in the week ended June 24th.

The report said…

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