After ending yesterday’s lackluster session little changed, stocks have moved sharply lower during trading on Thursday. The major averages have all shown significant moves to the downside after ending Wednesday’s session narrowly mixed.

Currently, the major averages are off their lows of the session but still firmly negative. The Dow is down 644.68 points or 1.7 percent at 37,816.24, the Nasdaq is down 261.43 points or 1.7 percent at 15,451.32 and the S&P 500 is down 66.42 points or 1.3 percent at 5,005.21.

A negative reaction to earnings news from Meta Platforms (META) is weighing on Wall Street, with the Facebook parent plunging by 12.4 percent.

Meta Platforms reported first quarter results that beat estimates on both the top and bottom lines but provided disappointing second quarter revenue guidance.

Tech giant IBM Corp. (IBM) has also come under pressure after reporting weaker than expected first quarter revenues. IBM also announced a deal to acquire HashiCorp (HCP) for $35 per share in cash, representing an enterprise value of $6.4 billion.

On the other hand, fellow Dow component Merck (MRK) has moved notably higher after reporting first quarter results that exceeded analyst estimates.

The sell-off on Wall Street also comes after Commerce Department released a report showing the U.S. economy grew by much less than expected in the first quarter of 2024.

The Commerce Department said gross domestic product increased by 1.6 percent in the first quarter after surging by 3.4 percent in the fourth quarter of 2023. Economists had expected GDP to jump by 2.5 percent.

Meanwhile, the Commerce Department said the personal consumption expenditures price index surged 3.4 percent in the first quarter after advancing by 1.8 percent in the fourth quarter.

Excluding food and energy prices, the PCE price index spiked 3.7 percent in the first quarter after jumping by 2.0 percent in the fourth quarter.

“The Fed wants to see inflation start coming down in a persistent manner, but the market wants to see economic growth and corporate profits increasing, so if neither are headed in the right direction then that’s going to be bad news for markets,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

Sector News

Software stocks are turning in some of the market’s worst performances, with the Dow Jones U.S. Software Index plunging by 3.5 percent to a three-month intraday low.

Substantial weakness is also visible among telecom stocks, as reflected by the 3.0 percent nosedive by the NYSE Arca North American Telecom Index. The index has tumbled to its lowest intraday level in over eight months.

Airline stocks are also seeing considerable weakness on the day, dragging the NYSE Arca Airline Index down by 2.7 percent.

Shares of Southwest Airlines (LUV) have plummeted by 9.1 percent after the airline reported disappointing first quarter results and warned about the impact of Boeing’s (BA) airplane delays.

Biotechnology, housing and retail stocks have also shown notable moves to the downside, while gold stocks are bucking the downtrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index plunged by 2.2 percent, while Hong Kong’s Hang Seng Index climb by 0.5 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.3 percent, the German DAX Index and the French CAC 40 Index are both down by 1.1 percent.

In the bond market, treasuries are extending the downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.0 basis points at 4.712 percent.