(RTTNews) – Following the sharp pullback seen early in the session, stocks continue to see substantial weakness in afternoon trading on Thursday. The major averages have more than offset the rally seen in the previous session, tumbling to their lowest intraday levels in well over a year.
Currently, the major averages are off their worst levels of the day but still sharply lower. The Dow is down 592.01 points or 1.9 percent at 30,076.52, the Nasdaq is down 396.41 points or 3.6 percent at 10,702.74 and the S&P 500 is down 108.12 points or 2.9 percent at 3,681.87.
The sell-off on Wall Street reflects concerns aggressive monetary policy action by central banks around the world may trigger a global recession.
Following the Federal Reserve’s widely expected 75 basis point interest rate hike on Wednesday, the Swiss National Bank unexpectedly raised interest rates for the first time since 2007.
The Bank of England also announced another 25 basis point rate hike. The BoE’s Monetary Policy Committee voted 6-3 to raise the bank rate to 1.25 percent, the highest rate since early 2009.
Taiwan’s central bank also increased its benchmark rate by 0.125 percentage points, raising rates for the second time in a row
In U.S. economic news, the Labor Department released a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended June 11th.
The report showed initial jobless claims edged down to 229,000, a decrease of 3,000 from the previous week’s revised level of 232,000.
Economists had expected jobless claims to dip to 220,000 from the 229,000 originally reported for the previous week.
Meanwhile, a separate released by the Commerce Department showed new residential construction in the U.S. plunged by much more than expected in the month of May.
The Commerce Department said housing starts tumbled by 14.4 percent to an annual rate of 1.549 million in May after jumping by 5.5 percent to a revised rate of 1.810 million in April.
Economists had expected housing starts to decrease by 1.3 percent to an annual rate of 1.701 million from the 1.724 million originally reported for the previous month.
The report also showed building permits slumped by 7.0 percent to an annual rate of 1.695 million in May after falling by 3.0 percent to a revised rate of 1.823 million in April.
Building permits, an indicator of future housing demand, were expected to decline by 1.9 percent to an annual rate of 1.785 million from the 1.819 million originally reported for the previous month.
The Federal Reserve Bank of Philadelphia also released a report showing a modest contraction in regional manufacturing activity in the month of June.
Airline stocks continue to turn in some of the market’s worst performances on the day, resulting in a 7 percent nosedive by the NYSE Arca Airline Index. The index has tumbled to its lowest intraday level in well over a year.
Substantial weakness also remains visible among semiconductor stocks, with the Philadelphia Semiconductor Index plunging by 5.9 percent to a more than one-year intraday low.
Housing stocks are also seeing considerable weakness on the heels of the disappointing housing starts data. Reflecting the weakness in the sector, the Philadelphia Housing Sector Index is plummeting by 5.7 percent to its lowest intraday level in almost two years.
Networking, computer hardware, energy and chemical stocks have also shown significant moves to the downside, while gold stocks are among the few groups bucking the downtrend.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index fell by 0.6 percent.
Meanwhile, the major European markets all showed significant moves to the downside on the day. While the French CAC 40 Index tumbled by 2.4 percent, the U.K.’s FTSE 100 Index and the German DAX Index plunged by 3.1 percent and 3.3 percent, respectively.
In the bond market, treasuries have moved notably higher over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6 basis points at 3.335 percent.