Summary

The major domestic equity indexes were lower on Thursday as President Donald Trump’s move to impose tariffs on up to $60 billion of Chinese imports drove fears about the impact on the global economy, fueling the largest percentage declines in Wall Street’s three major indexes since they entered correction territory six weeks ago.

Trump signed a presidential memorandum that will target the Chinese imports only after a consultation period. China will have space to respond, reducing the risk of immediate retaliation from Beijing.

Even after the indexes recovered somewhat from earlier lows, selling pressure resumed heading into the close as the Street continued fret over the potential scale of the tariffs and possible impact on global trade.

Major industrial stocks were hurt the worst. Boeing fell 5.2 percent, Caterpillar was down 5.7 percent and 3M down 4.7 percent. The three were among the largest drags on the Dow Jones Industrial Average. The S&P industrials sector was down 3.28 percent.

The losses marked the largest daily percentage drop for each of the major indexes since February 8, when the Dow and S&P confirmed a market correction from their Jan. 26 highs.

Selling was broad, with only the defensive utilities up 0.44 percent, out of 11 major S&P sectors.

The CBOE Volatility Index ended the trading day up 5.48 points at 23.34, its highest close since February 13.

Treasury prices gained ground as investors sought out safe havens. The benchmark 10-year notes were up 23/32 in price to yield 2.8244 percent, from 2.907 percent late on Wednesday.

The decline in yields weighed on financial stocks, which were down 3.70 percent, making them the worst performing of the major sectors.

Another decline in shares of Facebook, down 2.7 percent, continued to weigh on the broader market and the tech sector, the best performing S&P group for this year. The S&P technology index fell 2.69 percent on fears of greater regulation in the wake of the Facebook data leak.

Facebook Chief Executive Mark Zuckerberg said he was open to additional government regulation and happy to testify before the U.S. Congress.

AbbVie fell 12.8 percent after the company said it would not seek accelerated approval for its experimental lung cancer treatment based on results from a mid-stage study.

Approximately 7.77 billion shares changed hands on the major domestic equity exchanges, as compared to the 7.17 billion share average over the past 20 trading days.

Jobless Claims Increase

According to a report by the Labor Department on Thursday, the number of new claims for unemployment benefits increased by 3,000 claims to seasonally adjusted 229,000 claims for the week ended March 17. Data for the prior week was unrevised. Claims dropped to 210,000 during the week ended Feb. 24, which was the lowest level since December 1969.

Claims have now been below the 300,000-claim threshold, which is associated with a strong labor market, for 159 straight weeks. That is the longest such stretch since 1970, when the labor market was much smaller and should underpin consumer spending.

The labor market is near or at full employment. The jobless rate is at a 17-year low of 4.1 percent, not too far from the Federal Reserve’s forecast of 3.8 percent by the end of this year. in a vote of confidence in the economy. The Fed said it expected that “labor market conditions will remain strong.”

The Labor Department said claims for Maine and Colorado were estimated last week. It also said claims-taking procedures in Puerto Rico and the Virgin Islands had still not returned to normal after the territories were devastated by Hurricanes Irma and Maria last year.

The four-week moving average of initial claims, viewed as a better measure of labor market trends as it irons out week-to-week volatility, rose by 2,250 claims to 223,750 claims last week. The claims data covered the survey period for March non-farm payrolls.

The four-week average of claims fell 1,750 between the February and March survey periods, suggesting another month of solid job gains. The economy created 313,000 jobs in February. And again that should help to support consumer spending, which slowed at the start of the year.

The claims report also showed the number of people receiving benefits after an initial week of aid declined 57,000 to 1.83 million in the week ended March 10.

The four-week moving average of the so-called continuing claims dropped 11,750 to 1.88 million.