U.S. Stocks Seeing Further Downside Following Yesterday’s Pullback

Following the sharp pullback seen over the course of the previous session, stocks have seen further downside in morning trading on Friday. The major averages have slid firmly into negative territory, with the Nasdaq and the S&P 500 falling to their lowest intraday levels in a month.

Currently, the major averages are just off their lows of the session. The Dow is down 404.93 points or 1.2 percent at 34,387.83, the Nasdaq is down 90.84 points or 0.7 percent at 13,083.81 and the S&P 500 is down 46.08 points or 1.1 percent at 4,347.58.

The continued weakness on Wall Street may partly reflect ongoing concerns about the Federal Reserve aggressively tightening monetary policy.

In comments on Thursday, Fed Chair Jerome Powell said he saw merit in “front-end loading” policy moves and indicated a 50 basis point rate hike would be on the table at the central bank’s next meeting in early May.

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

Traders may also be moving to safer havens ahead of the release of a deluge of earnings news from big-name companies next week.

Coca-Cola (KO), General Electric (GE), Alphabet (GOOGL), Microsoft (MSFT), Boeing (BA), McDonald’s (MCD), Twitter (TWTR), Amazon (AMZN), Intel (INTC) and Exxon Mobil (XOM) are just a few of the companies due to report their quarterly results.

Among individual stocks, shares of Gap (GPS) are moving sharply lower after the apparel retailer lowered its first quarter sales guidance and announced the departure of Old Navy President and CEO Nancy Green.

Telecom giant Verizon (VZ) has also come under pressure after reporting first quarter earnings in line with estimates but providing disappointing guidance.

On the other hand, shares of Kimberly-Clark (KMB) have jumped after the consumer products company reported better than expected first quarter results and raised its full-year sales forecast.

Healthcare stocks have shown a significant move to the downside in morning trading, dragging the Dow Jones U.S. Health Care Index down by 2.5 percent.

Hospital operator HCA Healthcare (HCA) has helped lead the sector lower, plunging by 17.1 percent after reporting first quarter earnings that missed analyst estimates.

Considerable weakness has also emerged among gold stocks, as reflected by the 2.3 percent slump by the NYSE Arca Gold Bugs Index.

The sell-off by gold stocks comes amid a modest decrease by the price of the precious metal, with gold for June delivery slipping $4.60 to $1,943.60 an ounce.

Computer hardware, airline and telecom stocks are also seeing notable weakness, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong’s Hang Seng Index dipped by 0.2 percent.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has slumped by 1.1 percent, the French CAC 40 Index and the German DAX Index are down by 1.9 percent and 2.2 percent, respectively.

In the bond market, treasuries have moved modestly higher after showing a lack of direction early in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.3 basis points at 2.874 percent.

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