U.S. Stocks Pull Back Sharply After Seeing Early Strength

(RTTNews) - Stocks showed a significant move to the upside in early trading on Thursday but have shown a substantial downturn over the course of the session. The major averages have pulled back well off their highs of the session and into negative territory.

Currently, the major averages are off their lows of the session but still in the red. The Dow is down 52.63 points or 0.2 percent at 35,108.16, the Nasdaq is down 120.37 points or 0.9 percent at 13,332.69 and the S&P 500 is down 25.63 points or 0.6 percent at 4,433.82.

The sharp pullback on Wall Street comes as Treasury yields have shown a notable move back to the upside after giving back ground on Wednesday.

The yield on the benchmark ten-year note has more than offset yesterday's drop, reaching its highest intraday level since December 2018.

Concerns about the outlook for interest rates have contributed to the rebound by Treasury yields, with traders keeping an eye on comments by Federal Reserve Chair Jerome Powell.

Participating in an International Monetary Fund panel, Powell said he believes it would be appropriate to raise rates "a little more quickly" and predicted a 50 basis point rate hike would be on the table at the Fed's May meeting.

"Our goal is to use our tools to get demand and supply back in synch, so that inflation moves down and does so without a slowdown that amounts to a recession," Powell said.

"I don't think you'll hear anyone at the Fed say that that's going to be straightforward or easy," he added. "It's going to be very challenging. We're going to do our best to accomplish that."

CME Group's FedWatch Tool currently indicates that a 50 basis point rate hike at the May meeting is a near certainty.

Early in the session, stocks benefited from some upbeat earnings news, with shares of Tesla (TSLA) moving sharply higher after the electric car maker reported first quarter results that beat analyst estimates on both the top and bottom lines.

American Airlines (AAL) and United Airlines (UAL) are also posting strong gains after reporting first quarter losses but forecasting a return to profitability in the current quarter.

Sector News

Gold stocks have moved sharply lower over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 5.4 percent.

The sell-off by gold stocks comes amid a decrease by the price of the precious metal, with gold for June delivery falling $7.40 to $1,948.20 an ounce.

Substantial weakness has also emerged among oil service stocks, as reflected by the 3.2 percent slump by the Philadelphia Oil Service Index. The weakness in the sector comes despite a notable increase by the price of crude oil.

Steel, brokerage and networking stocks have also come under pressure as the day progressed, while significant strength remains visible among airline stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. Japan's Nikkei 225 Index shot up by 1.2 percent, while China's Shanghai Composite Index plunged by 2.3 percent.

Meanwhile, European stocks moved mostly higher on the day, although the U.K.'s FTSE 100 Index underperformed and ended the day roughly flat. The German DAX Index jumped by 1 percent and the French CAC 40 Index surged up by 1.4 percent.

In the bond market, treasuries have moved notably lower over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 9.1 basis points at 2.931 percent.