Stocks Moving Mostly Lower Amid Drop In Oil Prices - U.S. Commentary

(RTTNews) - Stocks have moved mostly lower over the course of the trading day on Tuesday after failing to sustain an initial move to the upside. The losses on the day are partly offsetting the strong upward move that was seen last Friday.

The major averages have seen some further downside in recent trading, hitting new lows for the session. The Dow is down 138.37 points or 0.8 percent at 17,373.20, the Nasdaq is down 26.75 points or 0.6 percent at 4,607.64 and the S&P 500 is down 12.53 points or 0.6 percent at 2,006.89.

The downturn by stocks was partly due to a sharp pullback by the price of crude oil, with the direction of crude recently driving the markets.

Crude for February delivery is currently tumbling $1.87 to $46.82 a barrel after rallying $2.44 to $48.69 a barrel last Friday.

Ongoing concerns about the global economy are weighing on the price of crude oil as well as stocks following news that the International Monetary Fund downgraded its global growth outlook.

Citing weak investment in many advanced and emerging market economies, the IMF said the global economy is expected to grow 3.5 percent this year, down from the 3.8 percent expansion projected in October. Growth in 2016 is projected to be 3.7 percent instead of 4 percent.

Negative sentiment may also have been generated by a report from the National Association of Home Builders showing a modest drop in homebuilder confidence in the month of January.

The report said the NAHB/Wells Fargo Housing Market Index edged down to 57 in January from an upwardly revised 58 in December.

Economist had expected the housing market index to inch up to 58 from the 57 originally reported for the previous month.

Among individual stocks, shares of FXCM (FXCM) have moved sharply lower on the day after the retail currency broker revealed further details of its emergency loan from Leucadia National (LUK).

Healthcare giant Johnson & Johnson (JNJ) is also under pressure after reporting better than expected fourth quarter earnings but on weaker than expected sales.

On the other hand, shares of Delta (DAL) are turning in a strong performance after the airline reported fourth quarter earnings that beat analyst estimates.

Sector News

Housing stocks have shown a notable move to the downside following the report from the NAHB, with the Philadelphia Housing Sector Index falling by 2.2 percent. The index is currently on pace to end the session at its lowest closing level in a month.

Hovnanian Enterprises (HOV) and M/I Homes (MHO) are turning in two of the housing sector's worst performances, falling by 6.4 percent and 5.6 percent, respectively.

Significant weakness is also visible among natural gas stocks, as reflected by the 2.1 percent loss being posted by the NYSE Arca Natural Gas Index. A drop by the price of natural gas is contributing to the weakness in the sector.

Electronic storage, retail, and healthcare stocks have also come under pressure, moving lower along with most of the other major sectors.

On the other hand, gold stocks have shown a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 4.4 percent. The strength in the sector comes as gold for February delivery is climbing $17.70 to $1,294.60 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

The major European markets also saw some strength on the day. While the French CAC 40 Index jumped by 1.2 percent, the U.K.'s FTSE 100 Index rose by 0.5 percent and the German DAX Index inched up by 0.1 percent.

In the bond market, treasuries are moving back to the upside after ending last Friday's trading in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.1 basis points at 1.774 percent.