Stocks took a drubbing Thursday as weak economic data fed fears of a re-emerging recession.
The Nasdaq plunged 2.4%, the SP 500 2.2% and the Dow Jones industrial average sank 2%. Volume increased on both major exchanges, according to preliminary data.
Each main index has dropped below its 50-day moving average after holding above that key support level for a few sessions. Leading stocks took it on the chin.
The Philadelphia Federal Reserve’s regional manufacturing index slid to a -16.6 reading in June. That awful reading compares to expectations of a small gain to 0.5.
What’s more, this is the Philly Fed report’s second-straight disappointment, after the -5.8 result seen in May.
Existing-home sales slipped in May to an annualized rate of 4.55 million, according to the National Association of Realtors. That was down from April’s 4.62 million pace and about 20,000 contracts below forecasts.
Finally, initial jobless claims fell by 2,000 to 387,000 in the week ended June 16. That was short of analyst expectations for 383,000 claims, according to Econoday.
Continuing claims were steady at 3.29 million vs. forecasts for a decline to 3.28 million. If the U.S. jobs market is improving, it’s doing so at a glacial pace.
Liquidity Services (LQDT) tumbled 7% in fast trade, compounding its 9% sell-off Wednesday. The online auctioneer of surplus inventory had pulled back amid concerns about competition from eBay (EBAY), stock sales by its CEO and comments from the CFO about margin growth. It was No. 1 in Wednesday’s IBD 50 lineup.
Under Armour (UA) sank 6% in huge volume. A UBS analyst downgraded the maker of athletic apparel to hold from buy, citing valuation and slowing market trends. The stock, No. 30 in the IBD 50, has found support at the 50-day line.
Under Armour rival Nike (NKE) fell 3% in heavy volume.
Cerner (CERN) slid 4% in heavy turnover. The electronic medical records play is now trading about 4% below an 84.20 flat-base buy point it cleared Monday. It may be getting hit by selling ahead of the Supreme Court’s ruling on ObamaCare, a decision that’s expected next week. Cerner was No. 24 in the IBD 50 as of Monday, but it fell out of the lineup Wednesday.
Celgene (CELG) plummeted 11% in big turnover after the biotech said it had withdrawn its application seeking the use of Revlimid as a treatment of multiple myeloma. The company said it planned to resubmit at a later date with more mature data. Celgene has dropped further below its 50-day and 200-day moving averages. It has an IBD Composite Rating of 90 out of a best-possible 99.