The major U.S. index futures are currently pointing to a higher open on Thursday, with stocks likely to regain ground following the sell-off seen late in the previous session.
The upward momentum on Wall Street comes as traders may see yesterday’s sell-off as an opportunity to pick up stocks at somewhat reduced levels following the recent upward trend.
The futures saw further upside following the release of revised Commerce Department data showing the U.S. economy grew by less than previously estimated in the third quarter.
The report said real gross domestic product jumped by 4.9 percent in the third quarter, reflecting a downwardly revision from the previously reported 5.2 percent surge. Economists had expected the pace of GDP growth to be unrevised.
The Commerce Department said the slower than previously estimated GDP growth primarily reflected a downward revision to consumer spending.
While third quarter GDP growth remains relatively strong, the downward revision may add to optimism about the Federal Reserve cutting interest rates early next year.
Stocks recovered from initial weakness and moved mostly higher over the course of morning trading on Wednesday but came under significant pressure in the latter part of the session. The major averages moved sharply lower in late-day trading, partly offsetting recent strength.
The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow slumped 475.92 points or 1.3 percent to 37,082.00, the Nasdaq dove 225.28 points or 1.5 percent to 14,777.93 and the S&P 500 tumbled 70.02 points or 1.5 percent to 4,698.35.
The late-day sell-off on Wall Street was largely attributed to profit taking, with traders cashing in on the strong upward move seen in recent sessions.
The Dow and the Nasdaq closed higher for the ninth consecutive session on Tuesday, as traders continued to express optimism about the outlook for interest rates.
The upward trend lifted the Dow to new record highs, while the Nasdaq and the S&P 500 reached their best levels in nearly two years.
A steep drop by shares of FedEx (FDX) also weighed on the markets, with the delivery giant plunging by 12.1 percent on the day.
The nosedive by FedEx came after the company reported weaker than expected fiscal second quarter results and lowered its full-year revenue guidance.
Meanwhile, traders shrugged off a Conference Board showing a much bigger than expected improvement in U.S. consumer confidence, which had contributed to the rebound in early trading.
The Conference Board said its consumer confidence index jumped to 110.7 in December from a downwardly revised 101.0 in November.
Economists had expected the consumer confidence index to rise to 103.4 from the 102.0 originally reported for the previous month.
A separate report released by the National Association of Realtors showed an unexpected rebound in U.S. existing home sales in the month of November.
Biotechnology stocks moved sharply lower over the course of the session, with the NYSE Arca Biotechnology Index plunging by 3.4 percent after ending Tuesday’s trading at a five-month closing high.
Netherlands-based Argenx (ARGX) led the sector lower, plummeting by 25.1 percent after reporting disappointing results from a late-stage trial of its therapy for an autoimmune condition that causes skin blistering.
Substantial weakness also emerged among semiconductor stocks, as reflected by the 2.9 percent slump by the Philadelphia Semiconductor Index. The index reached a record closing high on Tuesday.
Transportation stocks also saw considerable weakness amid the steep drop by the FedEx, dragging the Dow Jones Transportation Average down by 2.4 percent.
Banking, networking and gold stocks also came under pressure as the day progressed, moving lower along with most of the other major sectors.