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Tech Stocks Likely to Catch Investors’ Attention on Wall Street

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Thursday following the substantial volatility seen in the previous session.

The markets may benefit from bargain hunting after the tech-heavy Nasdaq ended Wednesday?s trading at its lowest closing level in well over a month.

Trading activity is likely to be somewhat subdued, however, as some traders look to get a head start on the long weekend.

Technology stocks have been key drivers of the markets in recent session and are likely to remain in focus on the day.

Stocks saw considerable volatility over the course of the trading session on Wednesday following the sell-off seen Tuesday afternoon. The major averages spent the day showing wild swings back and forth across the unchanged line.

The major averages eventually all closed in negative territory, with the tech-heavy Nasdaq once again underperforming its counterparts.

While the Nasdaq slid 59.58 points or 0.9 percent to 6,949.23, the S&P 500 fell 7.62 points or 0.3 percent to 2,605.00 and the Dow edged down 9.29 points or less than a tenth of a percent to 23,848.42.

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The volatility on Wall Street extends a recent trend, as the pullback seen in the previous session came on the heels of the substantial rebound seen on Monday.

A notable decline by Amazon (AMZN) weighed on the tech-heavy Nasdaq after a report from Axios said President Donald Trump wants to “go after” the online retailer.

Sources who’ve discussed the issue with Trump told Axios the president has talked about changing Amazon’s tax treatment because he’s worried about mom-and-pop retailers being put out of business.

Meanwhile, traders largely shrugged off a Commerce Department report showing stronger than previously estimated economic growth in the fourth quarter of 2017.

The report said gross domestic product climbed by 2.9 percent in the fourth quarter, reflecting an upward revision from the previously estimated 2.5 percent increase. Economists had expected the pace of GDP growth to be upwardly revised to 2.7 percent.

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With the upward revision, the GDP growth in the fourth quarter reflects only a modest slowdown from the 3.2 percent jump in the third quarter.

The report paints a positive picture of the economy in the final three months of last year, although the data was likely viewed as old news.

A separate report from the National Association of Realtors showed a bigger than expected rebound in pending home sales in the month of February.

NAR said its pending home sales index jumped by 3.1 percent to 107.5 in February after plunging by 5 percent to a downwardly revised 104.3 in January. Economists had expected pending sales to climb by 2.1 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

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Oil service stocks showed a significant move to the downside on the day, dragging the Philadelphia Oil Service Index down by 2.1 percent. The index ended the session at its lowest closing level in well over three months.

The weakness among oil service stocks comes amid a decrease by the price of crude oil following the release of a report showing an unexpected weekly increase in oil inventories.

Considerable weakness was also visible among semiconductor stocks, which extended the sell-off seen in the previous session. The Philadelphia Semiconductor Index slumped by 2.1 percent to a one-month closing low.

Gold stocks also moved sharply lower amid another steep drop by the price of the precious metal, with the NYSE Arca Gold Bugs Index falling by 2 percent.

Chemical and retail stocks also saw notable weakness on the day, while tobacco, real estate, and pharmaceutical stocks showed strong moves to the upside.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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