Stocks Move Sharply Lower Amid Global Growth Concerns - U.S. Commentary

(RTTNews) - After showing a lack of direction throughout the previous session, stocks have come under pressure in early trading on Thursday. The major averages have slid firmly into negative territory, with the Dow and the S&P 500 hitting their lowest intraday levels in over three months.

Currently, the major averages are lingering near their worst levels of the day. The Dow is down 174.56 points or 1 percent at 17,969.64, the Nasdaq is down 21.81 points or 1 percent at 2,117.37 and the S&P 500 is down 59.44 points or 1.1 percent at 5,179.58.

Concerns about the outlook for global economic growth have contributed to the early weakness on Wall Street following the release of disappointing Chinese trade data.

A report out of China showed that exports fell 10 year-over-year in September compared to expectations for a decrease of about 3 percent. Imports also fell by 1.9 percent, belying expectations for a 0.9 percent increase.

The Chinese trade surplus subsequently narrowed to $42 billion, smaller than the $53 billion surplus forecast by economists.

Julian Evans-Pritchard, China Economist at Capital Economics, said, "Overall, today's data are a reminder that China faces a challenging external environment which is likely to keep export growth subdued in coming quarters."

"Separately, the drop in imports could be an early sign that the recent recovery in economic activity is losing momentum," he added. "Nonetheless, we would caution against reading too much into a single data point given the volatility of the trade figures."

Traders also continue to express concerns about a near-term interest rate hike by the Federal Reserve after a report from the Labor Department showed initial jobless claims at their lowest level in over forty years.

The Labor Department said initial jobless claims came in at 246,000 in the week ended October 8th, unchanged from the previous week's revised level. Economists had expected jobless claims to climb to 254,000.

With the downward revision to the figure for the previous week, jobless claims held at their lowest levels since November of 1973.

Steel stocks have shown a particularly steep drop on the day amid concerns about global demand. As a result, the NYSE Arca Steel Index has plunged by 3.7 percent.

Semiconductor, financial, networking, and computer hardware stocks are also seeing significant weakness, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index tumbled by 1.6 percent.

The major European markets have also come under pressure on the day. While the U.K.'s FTSE 100 Index has slumped by 1.1 percent, the German DAX Index and the French CAC 40 Index are down by 1.4 percent and 1.6 percent, respectively.

In the bond market, treasuries are regaining some ground after trending lower over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.2 basis points at 1.736 percent.