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Market Hustle: Nasdaq Sees Biggest Falls Since 2011

NEW YORK (TheStreet) -- U.S. stocks suffered over Thursday's session as a two-day recovery was stopped short by heavy selling of high-momentum names in the technology and biotech sectors. The losses came even as data showed improvement in labor market conditions. A day earlier, stocks were lifted on the dovish tone of minutes from the latest Federal Reserve meeting.

  • The Dow Jones Industrial Average closed down 1.62% to 16,170.22 while the S&P 500 ended 2.09% lower to 1,833.08 -- both indices suffered their biggest falls in two months. Meanwhile, the Nasdaq was the worst hit, posting its biggest decline since November 2011. The index took off 3.1% to 4,054.11.
  • In technology, some of the heaviest-volume laggards included Facebook (FB - Get Report) which took off 5.2% to $59.16, Yelp (YELP - Get Report) which plummeted 10.9% to $63.47, and Zynga (ZNGA - Get Report) which shed 6.9% to $4.07. In biotech, Gilead Sciences (GILD) dropped 6.7% to $65.90 while Alexion Pharmaceuticals (ALXN) plunged 7.5% to $144.19.
  • In earnings news, Rite Aid (RAD) surged 8.4% after posting fourth-quarter earnings that beat expectations by 2 cents at 6 cents a share. Bed Bath & Beyond (BBBY) was a top laggard in the S&P 500, slumping more than 6.2% after guiding fiscal first-quarter earnings to a lower-than-expected 92 cents to 96 cents a share.
  • JPMorgan (JPM) and Wells Fargo (WFC) will report first-quarter earnings before the market opens on Friday.
  • Sam Stovall, S&P Capital IQ's chief equity strategist, noted that the longer-term equity outlook remains bullish to him despite the recent stall in U.S. equity prices. The recent rotations out of small caps and biotech stocks may actually be wringing out the excess speculation in the market without upending the market as a whole, he explained. "While Q1 EPS estimates have stalled along with prices, EPS growth is expected to reaccelerate as the year progresses," said Stovall.
  • U.S. weekly jobless claims fell 32,000 in the week of April 5 to 300,000, lower than the average economist's estimate of 320,000. The last time initial claims were this low was May 12, 2007, when they were at 297,000. The four-week moving average also dropped, down 4,750. A separate government report showed that March import prices rose by a more-than-expected 0.6%.
  • In international markets, the Hang Seng closed 1.51% higher while the Nikkei was flat. The DAX was 0.55% lower while the FTSE was 0.10% higher.
  • U.S. markets closed higher on Wednesday after Alcoa (AA) kicked-off the first-quarter season with an earnings beat and the release of the minutes of the latest meeting of the Federal Open Market Committee. Minutes from the Federal Reserve's March policy meeting indicated that members were concerned the market had overreacted to a hawkish-sounding forecast. Some even questioned whether there's been enough stimulus to support the economy. "The minutes add to the view private markets overestimated a hawkish move by the Fed. They clearly did not shift in that direction," said Dan Greenhaus, BTIG's chief strategist.

-- By Jane Searle and Andrea Tse in New York

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SYM TRADE IT LAST %CHG
FB $85.80 -2.51%
YELP $42.47 -4.58%
ZNGA $2.88 -2.04%
AAPL $124.53 -1.75%
GOOG $521.52 -1.91%

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