Stocks Mostly Lower On Profit Taking, Drop In Oil Prices - U.S. Commentary

(RTTNews) - On the heels of the rally seen in the previous session, stocks have given back some ground over the course of the trading day on Thursday. The losses on the day have partly offset the upward move seen over the three previous sessions.

In recent trading, the major averages have climbed off their worst levels, but they remain in the red. The Dow is down 141.44 points or 0.8 percent at 17,607.65, the Nasdaq is down 35.40 points or 0.7 percent at 5,035.73 and the S&P 500 is down 19.99 points or 1 percent at 2,053.08.

Profit taking may be contributing to the weakness on Wall Street following yesterday's strong gains, which came after the monetary policy decision by the Federal Reserve.

The Fed's decision to raise interest rates by a quarter point was widely expected, and the central bank seemed to convince traders any further rate hikes will be gradual.

Fed Chair Janet Yellen stressed that any additional rate hikes going forward would be based on incoming economic data.

With most signs pointing to strength in the labor market, analysts have suggested the focus should be on inflation, which is currently below the Fed's 2 percent target.

A decrease by the price of crude oil is also weighing on the markets, with crude for January delivery sliding $0.63 to $34.89 a barrel after tumbling $1.83 to a new six-year closing low of $35.52 a barrel on Wednesday.

On the economic front, the Labor Department released a report before the start of trading showing a bigger than expected pullback in initial jobless claims in the week ended December 12th.

The report said initial jobless claims fell to 271,000, a decrease of 11,000 from the previous week's unrevised level of 282,000. Economists had expected jobless claims to pull back to 275,000.

The Conference Board also released a report showing that its leading economic indicators index rose by 0.4 percent in November, exceeding economist estimates for a 0.2 percent increase.

Meanwhile, a separate report from the Philadelphia Federal Reserve showed an unexpected contraction in regional manufacturing activity in December.

Sector News

Gold stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 6.7 percent. With the steep drop, the index has fallen to its lowest intraday level in almost a month.

The sell-off by gold stocks comes amid a sharp drop by the price of the precious metal, with gold for February delivery tumbling $23.40 to $1,053.40 an ounce.

Considerable weakness is also visible among energy stocks, which are moving lower along with the price of crude oil.

Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index are down by 3.5 percent and 3.3 percent, respectively.

Steel, telecom, railroad, and computer hardware stocks are also seeing notable weakness, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region saw considerable strength during trading on Thursday. Japan's Nikkei 225 Index shot up by 1.6 percent, while China's Shanghai Composite Index jumped by 1.8 percent.

The major European markets have also shown strong moves to the upside on the day. While the German DAX Index surged up by 2.6 percent, the French CAC 40 Index advanced by 1.1 percent and the U.K.'s FTSE 100 Index climbed by 0.9 percent.

In the bond market, treasuries are regaining some ground after moving lower over the past three sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.2 basis points at 2.245 percent.