FOX Business: Capitalism Lives Here
Wall Street dove deep into the red Thursday as traders went on defense and fled to the bond market amid geopolitical strife.
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The Dow Jones Industrial Average fell 264 points, or 1.5%, to 16945, the S&P 500 dropped 32.3 points, or 1.6%, to 1965, and the Nasdaq Composite slipped 88.5 points, or 1.9%, to 4466.
The broad declines came a day after Wall Street saw its best gains in a month. Investors exited stocks and turned to government bonds, which are seen as a safe haven. The benchmark 10-year Treasury yield recently ticked 0.06 percentage points lower to 2.51%.
Geopolitical worries continued to spook investors. On Thursday, Iraq’s prime minister said Islamic State militants informed intelligence agents of a plot to attack subways in the U.S. and Paris. The Obama administration has yet to confirm the threat. Elsewhere, reports indicated that a law was drafted in Russia to allow the country to seize foreign assets.
Mixed readings on the U.S. economy also weighed on the broader market. According to the Labor Department, the number of Americans filing for unemployment benefits rose 12,000 to a seasonally adjusted 293,000 last week. Economists polled by Thomson Reuters projected initial jobless claims of 300,000.
Meanwhile, orders for long-lasting manufactured goods in August posted its steepest drop on record. New orders fell 18.2% compared to July, more than expectations for a 17.5% drop.
With the Federal Reserve expected to raise interest rates in the middle of next year, traders are closely watching any reports that shed light on the state of the economy.
The Commerce Department will release its third reading on second-quarter gross domestic product Friday. Based on the latest update, GDP grew at a seasonally adjusted annual rate of 4.2%. GDP contracted 2.1% in the first quarter.
Thursday’s selloff hit the technology sector particularly hard, with Apple (NASDAQ:AAPL) leading the way. The Nasdaq, which is down about 2.5% since Friday’s close, is now on pace to book its worst week since April.
Apple was forced to pull an update for its newest mobile operating system, iOS 8, after users reported issues. The consumer tech giant released a workaround to fix the issue on Thursday, but Apple shares still fell 3.8% to $98.87.
On the corporate front, education publisher Scholastic (NASDAQ:SCHL) tumbled 5.7% after reporting a wider-than-expected loss for the first quarter. DirecTV (NYSE:DTV) traded 42 cents lower at $86.39. Shareholders of the satellite television provider voted in favor of DirecTV’s sale to AT&T (NYSE:T).
In commodities, West Texas Intermediate crude oil settled 27 cents lower at $92.53 a barrel. Wholesale New York Harbor gasoline climbed about five cents, or 2%, to nearly $2.72 a gallon.