Caution Ahead Of Jobs Report Leads To Sell-Off On Wall Street - U.S. Commentary

(RTTNews) - After coming under pressure in early trading on Thursday, stocks have seen further downside over the course of the session. The Dow is moving lower for the sixth consecutive session and has fallen to a six-month intraday low.

In recent trading, the major averages have climbed off their lows for the session, but they remain firmly in the red. The Dow is down 132.94 points or 0.8 percent at 17,407.53, the Nasdaq is down 90.96 points or 1.8 percent at 5,048.98 and the S&P 500 is down 19.66 points or 0.9 percent at 2,080.18.

The sell-off on Wall Street may partly reflect trepidation ahead of the monthly jobs report due on Friday, which could have a significant impact on the outlook for interest rates.

A strong report would likely add to speculation that the Federal Reserve will raise rates in September, while a weak report could provide ammunition for more dovish central bankers to argue that the rate hike should be delayed.

Economists expect the report to show an increase of about 212,000 jobs in July following the addition of 223,000 jobs in June. The unemployment rate is expected to hold at 5.3 percent.

The Labor Department released a report this morning showing that first-time claims for unemployment benefits edged slightly higher in the week ended August 1st.

The report said initial jobless claims edged up to 270,000, an increase of 3,000 from the previous week's unrevised level of 267,000. Economists had expected jobless claims to rise to 273,000.

With the modest increase, jobless claims climbed further off the more than forty-year low of 255,000 set in the week ended July 18th.

Among individual stocks, shares of Keurig Green Mountain (GMCR) have fallen sharply after the specialty coffee and coffeemaker company reported weaker than expected third quarter revenues and lowered its full-year guidance.

Fitness tracking device maker Fitbit (BIT) is also posting a steep loss after reporting that its profit margins fell during the second quarter.

Meanwhile, shares of Weight Watchers (WTW) have spiked higher after the weight loss company reported better than expected second quarter earnings and raised its full-year guidance.

Sector News

Biotechnology stocks have moved sharply lower over the course of the trading session, dragging the NYSE Arca Biotechnology Index down by 3.8 percent. With the drop, the index has fallen to its lowest intraday level in almost a month.

Agios Pharmaceuticals (AGIO) has helped to lead the biotech sector lower, plunging by 10.1 percent after reporting a wider than expected second quarter loss.

Considerable weakness is also visible among consumer discretionary stocks, as reflected by the 2.2 percent drop by the S&P 500 Consumer Discretionary Index.

Within the consumer discretionary sector, media companies such as Viacom (VIA) and 21st Century Fox (FOXA) are posting steep losses after reporting disappointing quarterly results.

Semiconductor stocks have also come under significant selling pressure, resulting in a 2 percent drop by the Philadelphia Semiconductor Index. The index is on pace to set a nine-month closing low.

Healthcare, trucking, software, and networking stocks are also seeing notable weakness, while gold and oil service stocks are bucking the downtrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index crept up by 0.2 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.

Meanwhile, the major European markets all moved lower on the day. While the German DAX Index fell by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both edged down by 0.1 percent.

In the bond market, treasuries have moved back to the upside after pulling back sharply over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.9 basis points at 2.229 percent.