The US markets ended deeply in red on Thursday, with the S&P 500 hitting a fresh low for the year and also reaching a new closing low, as traders cashed in on yesterday's gains, as the buying interest generated by the Bank of England's bond market intervention quickly evaporated. Cautiousness also prevailed in the markets as the Commerce Department released its third estimate of US economy activity in the second quarter, showing the decrease in gross domestic product was unrevised from the previous estimate. The report said real GDP fell by 0.6 percent in the second quarter, unchanged from the drop reported last month and in line with street estimates. The dip in GDP in the second quarter follows a 1.6 percent slump in the first quarter, with the two consecutive decreases signaling the US economy is in a technical recession.
On the sectoral front, airline stocks turned in some of the market's worst performances on the day, resulting in a 4.4 percent nosedive by the NYSE Arca Airline Index. The index plummeted to a two-year closing low. Interest rate-sensitive utilities and commercial real estate stocks also saw substantial weakness, dragging the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index down by 4.1 percent and 3.1 percent, respectively. Significant weakness was also visible among semiconductor stocks, with the Philadelphia Semiconductor Index plunging by 3.3 percent to its lowest closing level in almost two years. Telecom, computer hardware and housing stocks also showed notable moves to the downside amid broad based weakness on Wall Street.
Dow Jones Industrial Average fell 458.13 points or 1.54 percent to 29,225.61, Nasdaq dropped 314.13 points or 2.84 percent to 10,737.51 and S&P 500 was down by 78.57 points 2.11 percent to 3,640.47.
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