Selloff on Wall Street Picks Up Steam

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The markets tumbled deep into the red in afternoon action Thursday as fears mounted about the global economy and corporate profits.

Today's Markets

As of 3:25 p.m. ET, the Dow Jones Industrial Average fell 92.5 points, or 0.63%, to 14526, the S&P 500 slid 12 points, or 0.77%, to 1540 and the Nasdaq Composite slumped 45 points, or 1.4%, to 3160.

The Dow and S&P 500 both took their third-biggest tumble of the year on Wednesday in what has been a particularly volatile week for Wall Street. The move came as Bank of America's (NYSE:BAC) earnings disappointed analysts and concerns grew about the eurozone debt crisis. The dark sentiment persisted into Thursday, with the S&P 500 breaking below the key 50-day-moving average for the first time this year.

Economic Data Disappoint

The move lower was driven by disappointing economic data. The Labor Department said the number of individuals filing for first-time jobless benefits rose by 4,000 last week to 352,000. Economists expected claims to rise to 350,000 from an initially reported 346,000.

The Philadelphia Federal Reserve's gauge of manufacturing activity in the mid-Atlantic region fell to 1.3 in April from 2.0 in March. The index was expected to rise to 3.0. Readings above zero point to expansion while those below indicate contraction. This comes on the heels of a disappointing reading from the New York Federal Reserve on Monday.

Mixed Corporate Earnings

Lawrence Creatura, a portfolio manager at Federated Investors, which has some $380 billion under management, said the recent bout of weakness can be blamed on uncertainty about corporate earnings.

"We’re still at the front end of earnings season, but we’re already getting some mixed commentary from management teams," he said. "It doesn’t necessarily mean the rest of the year will be poor, but at this stage, management has less visibility than they had several months ago."

Still, Creatura notes that the trend between optimism and retrenchment is one the markets have been able to navigate in recent years, and that the trend this year remains "modest, but positive." He suggests looking in the non-PC semiconductor market and certain portions of the health-care sector, including hospitals, for value plays.

Echoing that theme, Citigroup's (NYSE:C) equity analysts downgraded the U.S. markets to "underweight," while at the same time upgrading Japan to "neutral." The analysts see a 10% gain through the end of the year in global stocks, but only 4% for America.

There were a slew of first-quarter earnings out on the day for traders to parse through. Morgan Stanley (NYSE:MS) revealed adjusted profits and revenues that beat expectations. However, shares of the giant investment bank slid into the red. UnitedHealth (NYSE:UNH) and Verizon Communications (NYSE:VZ) posted mixed quarterly results ahead of the bell. Meanwhile, American Express (NYSE:AXP) weighed in after the bell Wednesday with mixed earnings.

Also on the corporate front, Apple (NASDAQ:AAPL) shares slid another 1% after the big selloff on Wednesday, putting the tech-heavy Nasdaq under pressure.

Oil and gold were sharply higher. The benchmark U.S. crude contract climbed $1.19, or 1.4%, to $87.86 a barrel. Wholesale New York Harbor gasoline jumped 1.1% to $2.753 a gallon. Gold rallied $14.80, or 1.1%, to $1,397 a troy ounce.

Foreign Markets

The Euro Stoxx 50 jumped 0.5% to 2577, the English FTSE 100 rose 0.41% to 6270 and the German DAX ticked up 0.52% to 7543.

In Asia, the Japanese Nikkei 225 sold off by 1.2% to 13220 and the Chinese Hang Seng edged lower by 0.26% to 21513.