Wall Street's main indexes fell on Thursday after data showed high levels of weekly jobless claims, while technology-related stocks resumed their slide with Apple Inc and Amazon.com Inc among the biggest drags on the Nasdaq.
Nine out of the 11 major S&P 500 sector indexes were lower, with technology stocks leading sectoral declines.
“A lot of this is retail investing. Everybody’s trying to book profits, but also trying not to spook markets either,” said William Herrmann, founder and managing partner at Wilshire Phoenix in New York City.
The Nasdaq, which entered correction territory earlier this month, slipped another 1% with Facebook Inc, Apple, Amazon.com, Tesla Inc, Microsoft Corp, Alphabet Inc and Netflix Inc together losing $150 billion in market capitalization in the first half hour of trading.
Bank stocks slipped 1.1%, while the broader financials subindex fell 0.8%, a day after the Federal Reserve pledged to keep interest rates low for a prolonged period to lift the world's biggest economy out of a pandemic-induced recession.
But with Fed Chair Jerome Powell indicating a long road to “maximum employment”, stock markets were disappointed by the lack of firmer details around the central bank’s stimulus plan.
“The Fed is out of tools and stock investors are finally realizing this,” said Greg Swenson, founding partner of Brigg Macadam.
“With rates this low and quantitative easing ramped up, there is little the Fed can do to help the economy rebound or limit the fallout from any unexpected economic weakness in the near-term.”
Adding to concerns around a stalling recovery, the Labor Department’s report showed the number of Americans filing new claims for unemployment benefits fell last week, but remained perched at extremely high levels.
At 11:32 a.m. ET the Dow Jones Industrial Average was down 21.56 points, or 0.08%, at 28,010.82 and the S&P 500 was down 18.26 points, or 0.54%, at 3,367.23.
General Electric Co rose 5.5% after Chief Executive Officer Larry Culp said on Wednesday the company's free cash flow would turn positive in the second half of this year.
Ford Motor Co added 3.8% as it said it had begun production of the new generation F-150 pickup truck at its Michigan facility.
German biotech firm BioNTech SE rose 2.2% as it said it was buying a production site from Swiss drugs giant Novartis to boost output of its potential coronavirus vaccine by several million doses.
Declining issues outnumbered advancers for a 1.60-to-1 ratio on the NYSE and a 1.29-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and no new low, while the Nasdaq recorded 26 new highs and 15 new lows.
Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Sagarika Jaisinghani and Shounak Dasgupta