Stocks Turn Lower After Seeing Strength In Morning Trading - U.S. Commentary

(RTTNews) - After moving mostly higher in morning trading on Wednesday, stocks have turned lower over the course of the trading session. The major averages have pulled back well off their highs for the session and into negative territory.

Currently, the major averages are all in the red, although the tech-heavy Nasdaq is down just 0.20 points at 4,777.24. The Dow is down 21.42 points or 0.1 percent at 17,961.65, while the S&P 500 is down 3.98 points or 0.2 percent at 2,076.37.

The pullback by stocks may partly reflect profit taking on the last trading day of 2014 following the strength seen for much of the year.

Trading activity has remained relatively subdued, however, with many traders away from their desks ahead of tonight's New Year's Eve festivities and the New Year's Day holiday on Thursday.

Gold stocks have shown a notable move to the downside on the day, partly offsetting the strong upward move seen in the previous session. Reflecting the weakness in the sector, the NYSE Arca Gold Bugs Index has fallen by 1.2 percent.

The weakness among gold stocks comes as the price of gold for February delivery is falling $13.60 to $1,186.80 an ounce.

Utilities and telecom stocks are also seeing some weakness on the day, although selling pressure has remained subdued.

On the other hand, notable strength remains visible among airline stocks, as reflected by the 1.4 percent gain being posted by the NYSE Arca Airline Index. With the gain, the index has reached a new twelve-year high.

Housing stocks are also turning in a strong performance following the release of an upbeat report on pending home sales in the month of November.

The National Association of Realtors said its pending home sales index rose 0.8 percent to 104.8 in November from a downwardly revised 104.0 in October. Economists had been expecting the index to increase by about 0.5 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Meanwhile, the Labor Department released a separate report before the start of trading showing a bigger than expected rebound in initial jobless claims in the week ended December 27th.

The report said initial jobless claims climbed to 298,000, an increase of 17,000 from the previous week's revised level of 281,000. Economists had expected jobless claims to rise to 290,000.

MNI Indicators also released a report showing that its Chicago business barometer fell to a five-month low in December, indicating a notably slower rate of growth in Chicago-area business activity.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday, although several markets were closed for the day. Hong Kong's Hang Seng Index rose by 0.4 percent, while Australia's All Ordinaries Index edged down by 0.1 percent.

The European markets saw some strength in an abbreviated session. The U.K.'s FTSE 100 Index rose by 0.3 percent, while the French CAC 40 advanced by 0.6 percent. The German market was closed on the day.

In the bond market, treasuries are moving modestly higher, extending a recent upward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.3 basis points at 2.177 percent.