MARKET SNAPSHOT: Nasdaq Composite Turns Higher, But Broader Market Struggles For Flight After Upbeat Data

Political drama out of Washington may continue to dog investor sentiment

The Nasdaq Composite on Thursday attempted to rebound, but the broader equity market struggled to gain traction, a day after Wall Street staged its sharpest selloff in months, fueled by ongoing political turmoil in Washington.

Early economic data, however, on employment and manufacturing offered some reasons for optimism.

The Nasdaq Composite Index was up 20 points, or 0.3%, at 6,031, after briefly losing its grip on the psychologically significant level of 6,000 in opening trade. On Wednesday, the technology-heavy index saw its worst one-day decline since late June (

The Dow Jones Industrial Average was off 14 points, or less than 0.1%, at 20,591, while the S&P 500 index slipped traded flat at 2,358. Both equity gauges suffered their worst daily slump since early September in the previous session.

Equities were helped in part by the latest economic data. Initial jobless claims fell by 4,000 in the latest week, the second-lowest reading of the economic recovery (, which began eight years ago. Continuing claims were at their lowest level since 1988. Separately, the Philadelphia Fed manufacturing index jumped to a reading of 38.8 in May from 22 in April (

"Even though optimism for Trump's pro-growth agenda has mostly unwound, if this political crisis deepens and elevated volatility persists, equities could see further weakness in the short-term driven by deleveraging across fundamental and systematic strategies," J.P. Morgan wrote in a note to clients, adding that "fundamentals remain supportive."

Wednesday's action came after the New York Times reported that U.S. President Donald Trump had asked former Federal Bureau of Investigations Director James Comey to drop an investigation between his inner circle and the Russians ( Among other things, the controversy was seen as making the passage of Trump's economic agenda--something analysts say is necessary to justify market valuations--less likely.

Wall Street could continue to be driven by the news coming out of Washington. Earlier on Thursday, Reuters ( reported that former National Security Adviser Michael Flynn and others on Trump's campaign team exchanged at least 18 undisclosed phone calls or emails ( with Russian contacts during the 2016 presidential race.

"The scandal is so dominant at the moment that I guess it doesn't take a lot to spook investors," said Connor Campbell, financial analyst at Spreadex, in emailed comments.

Need to know: The wheels are coming off for U.S. stocks, this classic gauge shows (

The reports have sparked talk of potential impeachment for Trump, though many believe the situation is far from reaching that point ( ( In one recent development, former FBI head Robert Muller has now been named as special counsel ( to investigate potential collusion between the Trump campaign and Russia.

Read:Stocks have an 86% chance of falling if weekly volatility rises (

Earnings in focus: Shares of Cisco Systems Inc.(CSCO) fell 7.4%, hitting its lowest level since January the networking giant reported its revenue decline was increasing ( Cisco also said it would lay off another 1,100 workers (

Read:Cisco shows effects of Trump uncertainty (

Alibaba Group Holding Ltd.(BABA) fell 3.6% after earnings fell short of expectations.

On the upside, Wal-Mart Stores Inc.(WMT) climbed 1.7% as earnings beat Wall Street forecasts, but revenue fell slightly short ( The retail giant was the biggest percentage gainer among Dow components

Read:Wal-Mart option traders are 'overly complacent' about earnings (

( shares of Brazil stocks and exchange-traded funds were under pressure after the country's opposition lawmakers called for President Michel Temer to resign ( after a bribery allegation. U.S.-listed shares of Brazilian multinational Vale SA(VALE5.BR) tumbled 10%, while the iShares MSCI Brazil Capped ETF(EWZ) slid 16%.

Cleveland Fed President Loretta Mester will speak on the economic outlook in Minneapolis, Minn. at 1:15 p.m. Eastern.

Read:Bernanke says he's always 'puzzled' by way markets ignore political risk until 'last moment' (

Overseas markets: Global stocks fell Thursday in the wake of the U.S. selloff. The Nikkei 225 index ( slid 1.3% alongside a sharp rise in the Japanese yen, which has surged as investors seek out perceived haven assets.

The dollar struggled, with the British pound popping above $1.30 for the first time since September after strong retail sales.

European stocks continued to come under pressure. The Stoxx Europe 600 index extended losses, dropping 0.9%, after logging a 1.2% decline Wednesday for its biggest one-day percentage loss since Sept. 26.

Read:Global investors must remember 'all news is local,' says Mark Mobius (

Gold prices rose $3.30 to $1,262 an ounce, while oil prices extended losses (, with West Texas Intermediate crude dropping 73 cents, or 1.5, to $48.34 a barrel.

(END) Dow Jones Newswires

May 18, 2017 10:03 ET (14:03 GMT)