Major Averages Pull Back Sharply After Yesterday's Rally

(RTTNews) - Stocks moved sharply lower over the course of the trading day on Thursday, giving back ground on the heels of the rally seen in the previous session. The pullback came after the major averages closed higher for three straight days.

Gold stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 7.1 percent. With the steep drop, the index fell to its lowest closing level in almost a month.

The sell-off by gold stocks came amid a sharp drop by the price of the precious metal, with gold for February delivery tumbling $27.20 to $1,049.60 an ounce.

Significant weakness was also visible among energy stocks, which came under pressure along with the price of crude oil. Crude for January delivery slid $0.57 to a nearly seven-year closing low of $34.95 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 4.2 percent and the NYSE Arca Natural Gas Index slumped by 3.1 percent.

Railroad stocks also saw considerable weakness on the day, resulting in a 3.1 percent drop by the Dow Jones Railroads Index. Norfolk Southern (NSC) and Kansas City Southern (KSU) posted steep losses.

Steel, housing, computer hardware, and chemical stocks also showed notable moves to the downside, reflecting broad based weakness on Wall Street.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow tumbled 253.25 points or 1.4 percent to 17,495.84, the Nasdaq slumped 68.58 points or 1.4 percent to 5,002.55 and the S&P 500 plunged 31.18 points or 1.5 percent to 2,041.89.