Stocks have come under pressure over the course of morning trading on Thursday, more than offsetting the upward move seen in the previous session. The major averages have slid firmly into negative territory, with the S&P 500 pulling back off yesterday's record closing high.
The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 237.54 points or 0.9 percent at 26,949.15, the Nasdaq is down 48.02 points or 0.6 percent at 8,255.95 and the S&P 500 is down 21.34 points or 0.7 percent at 3,025.43.
Renewed uncertainty about the potential for a long-term U.S.-China trade deal is contributing to the weakness on Wall Street.
Optimism about phase one of a trade deal has contributed to recent strength on Wall Street, but a new report from Bloomberg said Chinese officials are casting doubts about reaching a comprehensive long-term trade agreement.
People familiar with the matter told Bloomberg that Chinese officials have warned in private conversations that they are unwilling to budge on the thorniest issues.
In an apparent effort to calm the markets, President Donald Trump tweeted shortly before the start of trading that the U.S. and China are working on a new site to sign phase one of the trade deal.
Trump and Chinese President Xi Jinping had been due to meet and potentially sign the deal at the APEC summit in Chile, but the Chilean President recently called off the summit due to unrest in the country.
"China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances," Trump tweeted. "The new location will be announced soon. President Xi and President Trump will do signing!"
The uncertainty about the trade deal has offset the positive sentiment generated by another batch of upbeat earnings news, although Apple (AAPL) and Facebook (FB) continue to post notable gains after reporting better than expected quarterly results.
On the U.S. economic front, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 26th.
The report said initial jobless claims rose to 218,000, an increase of 5,000 from the previous week's revised level of 213,000.
Economists had expected jobless claims to inch up to 215,000 from the 212,000 originally reported for the previous week.
A separate report from the Commerce Department showed personal income and spending both increased in line with economist estimates in the month of September.
The report said personal income increased by 0.3 percent in September after climbing by an upwardly revised 0.5 percent in August.
Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent, matching the revised uptick seen in August.
Computer hardware stocks have shown a significant move to the downside in morning trading, dragging the NYSE Arca Computer Hardware Index down by 2.5 percent.
Western Digital (WDC) is leading the sector lower after the hard drive maker reported better than expected fiscal first quarter results but provided disappointing guidance and announced the retirement of its CEO Steve Milligan.
Energy stocks are extending yesterday's sell-off amid a steep drop by the price of crude oil, moving notably lower along with steel, transportation and financial stocks.
Meanwhile, gold stocks are among the few groups bucking the downtrend, benefiting a sharp increase by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index fell by 0.4 percent.
Meanwhile, the major European markets have moved to the downside on the day. While the U.K.'s FTSE 100 Index has slumped by 1.1 percent, the French CAC 40 Index is down by 0.4 percent and the German DAX Index is down by 0.2 percent.
In the bond market, treasuries have moved sharply higher amid renewed uncertainty about a U.S.-China trade deal. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 10.2 basis points at 1.694 percent.
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