The Nasdaq plummeted 483.48 points (2.6%) to 18,069.26, the S&P 500 plunged 104.11 points (1.8%) at 5,738.52 and the Dow slumped 427.51 points (1%) to 42,579.08.
The Labor Department released a report showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended March 1st. The report said initial jobless claims dipped to 221,000, a decrease of 21,000 from the previous week's unrevised level of 242,000. On Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of February.
The Commerce Department also released a report showing the U.S. trade deficit widened by more than expected in the month of January. The report said the trade deficit surged to a record high $131.4 billion in January from a revised $98.1 billion in December. The notably wider trade deficit came as the value of imports soared by 10.0% to $401.2 billion while the value of imports increased by 1.2% to $269.8 billion.
Semiconductor stocks turned in some of the market's worst performances, with the Philadelphia Semiconductor Index plunging by 4.5%. Airline stocks were substantially weak, as reflected by the 3.6% nosedive by the NYSE Arca Airline Index. Computer hardware stocks significant moved downwards, dragging the NYSE Arca Computer Hardware Index down to its lowest closing level in a month. Networking, retail, commercial real estate and software stock too were considerably weak while telecom, oil and housing stocks bucked the downtrend.
Asia-Pacific stocks moved mostly higher Japan's Nikkei 225 Index climbed by 0.8%, China's Shanghai Composite Index jumped by 1.2% and Hong Kong's Hang Seng Index surged by 3.3%. The major European markets turned in a mixed performance. the U.K.'s FTSE 100 Index slid by 0.8%, the French CAC 40 Index rose by 0.3% and the German DAX Index shot up by 1.5%.
In the bond market, treasuries regained ground after coming under pressure in early trading but still closed modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up 2.1 bps to 4.28%.