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Wall Street Takes a Beating on Thursday
17-Aug-17 16:30 ET
Dow -274.14 at 21750.73, Nasdaq -123.19 at 6221.90, S&P -38.10 at 2429.97
https://www.briefing.com/investor/markets/stock-market-update/2017/8/17/wall-street-takes-a-beating-on-thursday.htm

[BRIEFING.COM] Equities fell to heavy selling pressure on Thursday, dragging the major U.S. indices into negative territory for the week. The tech-heavy Nasdaq was hit the hardest, dropping 1.9%, as technology stocks underperformed. Meanwhile, the S&P 500 and the Dow settled with losses of 1.5% and 1.2%, respectively. For the week, the S&P 500 holds a loss of 0.5%.

The major indices opened Thursday's session with modest losses, but moved deeper into negative territory following a rumor that President Trump's chief economic advisor Gary Cohn plans to resign from his position as the Director of the National Economic Council. The White House later declared that the rumor was "100% false", but it did little to reverse the market's downward trend.

Reports indicate that Mr. Comey--who is seen as a key driver of Mr. Trump's economic agenda--is frustrated about comments from President Trump regarding last weekend's events in Charlottesville, VA. True or not, Thursday's rumor underlined the notion that President Trump's pro-growth agenda could be dead on arrival in Congress if lawmakers find it to be a political liability to work with the president.

However, it's also important to remember that many investors are looking for excuses to pull out of a market that just registered yet another record high a little more than a week ago on August 7. Following Thursday's slide, the Dow, the S&P 500, and the Nasdaq hover 1.7%, 2.1%, and 3.1%, respectively, below their record-high closing levels.

It's also worth pointing out that a van plowed into a crowd of people in Barcelona on Thursday, killing 13 and injuring more than 50. Local police deemed the incident a terrorist attack. While events similar to this one haven't prompted selling in the equity market so far this year, today's attack certainly didn't help the already bearish sentiment on Wall Street.

All 11 sectors finished Thursday's session in negative territory with the top-weighed technology sector (-2.0%) leading the retreat. Cisco Systems (CSCO 31.04, -1.30) was one of the tech sector's weakest components, dropping 4.0%, despite hitting both top and bottom line estimates. Chipmakers also showed notable weakness, pushing the PHLX Semiconductor Index lower by 2.6%.

The industrial sector also finished behind the broader market, losing 1.7%, as transports weighed, evidenced by the 2.4% decrease in the Dow Jones Transportation Average. Airlines led the transport retreat, pushing the US Global Jets ETF (JETS 29.02, -1.00) lower by 3.3%.

On the flip side, four sectors--health care (-1.3%), consumer staples (-0.9%), utilities (-0.8%), and real estate (-0.7%)--finished ahead of the broader market. Within the consumer staples group, Wal-Mart (WMT 79.70, -1.28) showed relative weakness, dropping 1.6%, despite reporting better than expected earnings.

In the bond market, Treasuries held losses in early-morning action, but began climbing as the equity market weakened. The benchmark 10-yr yield traded as high as 2.25%, but ended the day three basis points below its flat line at 2.20%.

Reviewing Thursday's economic data, which included the weekly Initial Claims Report, the August Philadelphia Fed Index, the July Industrial Production & Capacity Utilization Report, and the Conference Board's Leading Economic Index for July:

The latest weekly initial jobless claims count totaled 232,000 while the Briefing.com consensus expected a reading of 240,000. Today's tally was below the unrevised prior week count of 244,000. As for continuing claims, they declined to 1.953 million from the revised count of 1.956 million (from 1.951 million).
There are no new takeaways from those data series, which continue reflecting a tight labor market.
The Philadelphia Fed Survey for August declined to 18.9 from an unrevised 19.5 in July while economists polled by Briefing.com had expected a reading of 17.0.
The key takeaway from the report is that it showed a rebound in new orders after July figures hinted at a weak start to the third quarter.
Industrial Production increased 0.2% in July (Briefing.com consensus 0.3%) while Capacity Utilization was unchanged at 76.7% (Briefing.com consensus 76.7%) from a revised reading of 76.7% in June (from 76.6%).
The key takeaway from the report is that factory output in July remained at levels seen in February. The lack of significant change in capacity utilization suggests that the resource slack will persist, tempering inflation expectations.
The Conference Board's Leading Indicators report for July increased 0.3% (Briefing.com consensus 0.3%) after moving higher by an unrevised 0.6% in June.

On Friday, investors will receive just one economic report--the preliminary reading of the University of Michigan Consumer Sentiment Index for August (Briefing.com consensus 94.0). The report will cross the wires at 10:00 ET.

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