Stocks Climb Well Off Worst Levels But Remain In The Red - U.S. Commentary

(RTTNews) - After coming under pressure in early trading on Thursday, stocks have regained some ground as the day has progressed but remain mostly negative. With the drop on the day, the major averages are adding to the losses posted in the previous session.

Currently, the major averages are posting moderate losses on the day. The Dow is down 48.42 points or 0.3 percent at 17,555.45, the Nasdaq is down 16.14 points or 0.3 percent at 5,049.71 and the S&P 500 is down 4.87 points or 0.2 percent at 2,058.49.

The early weakness on Wall Street was partly due to the release of some disappointing U.S. economic data.

Before the start of trading, the Labor Department released a report showing a bigger than expected increase in initial jobless claims in the week ended December 26th.

The report said initial jobless claims climbed to 287,000, an increase of 20,000 from the previous week's unrevised level of 267,000. Economists had expected jobless claims to edge up to 270,000.

With the bigger than expected increase, jobless claims rose to their highest level since hitting 296,000 in the week ended July 4th.

A separate report from MNI Indicators said Chicago-area business activity unexpectedly contracted at a faster pace in December.

MNI Indicators said its Chicago business barometer dropped to 42.9 in December from 48.7 in November, with a reading below 50 indicating a contraction in activity.

The decrease by the business barometer came as a surprise to economists, who had expected the index to climb to 50.0. The unexpected drop pulled the barometer down to its lowest level since July of 2009.

Nonetheless, trading activity has remained relatively subdued, with many traders away from their desks on New Year's Eve.

Sector News

While most of the major sectors have recovered from their worst levels of the day, significant weakness remains visible among utilities stocks. The Dow Jones Utilities Average is down by 1.2 percent, pulling back further off the two-month closing high set on Tuesday.

Edison International (EIX), Dominion Resources (D), and FirstEnergy (FE) are turning in some of the utilities sector's worst performances.

Airline, pharmaceutical, and computer hardware stocks also continue to see some weakness on the day, although selling pressure has waned from earlier in the session.

On the other hand, natural gas stocks have shown a strong move to the upside, driving the NYSE Arca Natural Gas Index up by 1.7 percent. The strength in the sector comes as natural gas for February delivery is climbing $0.150 to $2.364 per million BTUs.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, although the Japanese markets were closed on the day. Hong Kong's Hang Seng Index edged up by 0.2 percent, while Australia's All Ordinaries Index dipped by 0.4 percent.

Meanwhile, the major European markets moved to the downside, with the German markets closed for a holiday. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index dropped by 0.9 percent.

In the bond market, treasuries have pulled back off their best levels but continue to see modest strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.9 basis points at 2.284 percent.