Stocks Close Slightly Lower After Seeing Early Strength - U.S. Commentary

(RTTNews) - Stocks moved slightly lower over the course of the trading session on Thursday after failing to sustain an early upward move. Selling pressure remained subdued, however, limiting the downside for the major averages.

The major averages ended the day just below the unchanged line. The Dow slipped 13.90 points or 0.1 percent to 19,819.78, the Nasdaq dipped 6.47 points or 0.1 percent to 5,432.09 and the S&P 500 edged down 0.66 points or less than a tenth of a percent to 2,249.26.

The pullback on Wall Street came as traders continued to cash in on recent gains, which lifted the tech-heavy Nasdaq to a record closing high on Tuesday.

Nonetheless, traders remained reluctant to make significant moves in the final days of 2016, with some away from their desks ahead of another long weekend.

The performance of the Dow continues to attract attention, as traders wait to see if the blue chip index can cross the 20,000 level.

While the Dow has climbed within striking distance of the key psychological level, the pullback seen over the past two days has dampened hopes the index will break through this year.

On the economic front, the Labor Department released a report showing that initial jobless claims pulled back in line with estimates in the week ended December 24th.

The report said initial jobless claims dipped to 265,000, a decrease of 10,000 from the previous week's unrevised level of 275,000. The drop in jobless claims matched economist estimates.

The modest decline came after jobless claims reached their highest level since the week ended June 11th in the previous week.

Sector News

Banking stocks came under pressure over the course of the trading session, dragging the Dow Jones Banks Index down by 1 percent. The index pulled back further off the eight-year closing high it set on Tuesday.

Citizens Financial (CFG), Fifth Third Bancorp (FITB) and Regions Financial (RF) turned in some of the banking sector's worst performances on the day.

Considerable weakness also emerged among brokerage stocks, as reflected by the 1 drop by the NYSE Arca Broker/Dealer Index. With the decline, the index fell to its lowest closing level in almost a month.

On the other hand, gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 6.9 percent to its best closing level in over a month.

The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for February delivery jumping $17.20 to $1,158.10 an ounce.

Utilities stocks also turned in a strong performance as the day progressed, resulting in a 1.3 percent advance by the Dow Jones Utilities Average.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Thursday. Japan's Nikkei 225 Index slumped by 1.3 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index crept up by 0.2 percent, the French CAC 40 Index and the German DAX Index both dipped by 0.2 percent.

In the bond market, treasuries saw further upside following the notable strength seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 2.477 percent.

Looking Ahead

A report on Chicago-area business activity may attract some attention on Friday, although trading activity is likely to be subdued ahead of the long weekend.