By Jessica Menton -
U.S. stocks wavered Thursday, with the Dow Jones Industrial Average struggling to maintain early gains after global shares dropped, while weak data out of China and Japan -- the world’s second and third-largest economies -- heightened concerns about slowing global growth. Stocks continued their wild roller-coaster ride Thursday, extended the previous day’s losses, where U.S. stocks plunged sharply in the final minutes of trading Wednesday, sending the Dow nearly 240 points lower by the day's end.
Global shares fell on renewed concerns about China's economy decelerating faster than previously thought, coupled with the uncertainty surrounding whether the U.S. Federal Reserve will announce raising rates for the first time in nearly a decade next week.
“That group [The Federal Reserve] really has reached no consensus on when the next step should be taken, or even if it should, and that my friends is the cherry on top of the Sundae that is market volatility,” Stephen Guilfoyle, managing director of NYSE Floor Operations at Deep Value Inc., said in a note Thursday.
The Dow Jones Industrial Average (INDEXDJX:.DJI) rose 19 points, or 0.12 percent, to 16,272. The Standard & Poor's 500 index (INDEXSP:.INX) edged up 5 points, or 0.25 percent, to 1,947. The Nasdaq composite (INDEXNASDAQ:.IXIC) added 19 points, or 0.4 percent, to 4,774.
Asian shares dropped Thursday after China’s as producer prices, or wholesale inflation, remained in deflation last month, while Japan’s machinery orders, a leading indicator of capital expenditure, unexpectedly fell in July.
China’s producer price index dropped 5.9 percent in August after declining 5.4 percent the prior month, marking the 42nd consecutive month of declines. Following the report, China’s benchmark Shanghai Composite index closed down 1.5 percent.
Meanwhile, Japan's core machinery orders fell 3.6 percent in July, missing analysts’ forecasts for a rise of 3.7 percent, sending the Nikkei index down 2.5 percent. The losses came a day after Japan's benchmark index surged 7.7 percent, posting its biggest gain since October 2008, helped by the prospect of corporate tax cuts and additional stimulus in China.
European stocks traded lower following Asia’s weak lead, sending Germany's DAX and France's CAC leaped 1.2 percent and 1.5 percent, respectively.
Separately, fewer Americans filed new claims for unemployment benefits last week as initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 275,000 for the week ended Sept. 5, the Labor Department said Thursday.
Initial claims for unemployment insurance have been below 300,000 for 27 straight weeks, the longest such stretch since the 1970s. Claims below the 300,000 threshold is considered to be a mark of a strengthening labor market.