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U.S. stocks dropped on Thursday as technology-related shares extended a recent slide and as data showed high levels of weekly jobless claims. In Canada, the TSX also fell, with the energy sector losing some ground despite a turnaround in oil prices to end the day higher in New York.

The S&P/TSX Composite Index closed down 48.94 points, or 0.30%, at 16,246.72. Activity was mixed, with consumer, industrials, utilities and health-care sectors all edging up. Similar to the U.S., technology was the weakest spot, with that sector declining 1.42%. Celestica was the top gainer in the Composite, rising 3.98%, while Endeavour Mining was the top decliner, losing 4.56%. Energy stocks overall lost half a percentage point.

Apple Inc and Amazon.com Inc were among the biggest drags on the S&P 500 and Nasdaq, which entered correction territory this month.

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From the March market lows, “this has been an amazing recovery represented by a few good tech names,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

“They had an incredible last week of August, and I think this is a rational profit-taking scenario at the moment.”

He expects tech-related names to bounce back before the end of the year.

While the S&P 500 technology index weighed the most on the benchmark index, the S&P 500 real estate sector and financials also sold off sharply.

Adding to concerns around a stalling recovery, the Labor Department’s report showed the number of Americans filing new claims for unemployment benefits fell last week, but remained perched at extremely high levels.

On Wednesday, the Federal Reserve pledged to keep interest rates low for a prolonged period to lift the world’s biggest economy out of a pandemic-induced recession.

Unofficially, the Dow Jones Industrial Average fell 129.94 points, or 0.46%, to 27,902.44, the S&P 500 lost 28.42 points, or 0.84%, to 3,357.07 and the Nasdaq Composite dropped 140.19 points, or 1.27%, to 10,910.28.

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Fed Chair Jerome Powell laid out a menu of factors - including wage growth, workforce participation and disparities in minority joblessness relative to whites - that must be satisfied before the Fed would view the economy at maximum employment, and thus even consider raising interest rates.

“Investors love when the Fed lowers rates, because they feel that’s good for market,” Dollarhide said. “But if the Fed says we need to keep rates low for longer, then people start worrying about the economy itself.”

Oil prices rose more than 2%, turning positive as OPEC and its allies said the producer group would crack down on countries that failed to comply with output cuts and planned to hold an extraordinary meeting in October if oil markets weaken further.

After falling early in the session amid bearish jobs numbers and a ramp up in Gulf of Mexico oil output following Hurricane Sally, crude benchmarks reversed course to gain on the day, bolstered by comments from OPEC.

“Although no amendments to the current supply-cut deal have been proposed by OPEC+ today, the producers group gave the impression that it does not sweep troubles under the carpet,” said Rystad Energy’s Head of Oil Markets, Bjornar Tonhaugen.

Brent oil futures extended gains to settle up $1.08 or 2.56% at $43.30 a barrel. U.S. crude futures settled higher by 81 cents, or 2.02% at $40.97 a barrel. Both contracts rose more than 4% on Wednesday.

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The panel of major producers, including Saudi Arabia and Russia, did not recommend any changes to their current output reduction target of 7.7 million barrels per day (bpd), or around 8% of global demand, according to a draft press release and an internal report.

The panel pressed laggards such as Iraq, Nigeria and the United Arab Emirates to cut more barrels to compensate for overproduction in May-July, while extending the compensation period from September to the end of December, according to three OPEC+ sources.

Read more: Stocks that saw action Thursday - and why

Reuters, with files from Darcy Keith of The Globe and Mail

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