Stocks Turning In Mixed Performance Amid Sharp Drop By Oil - U.S. Commentary

(RTTNews) - With traders reacting to a sharp drop by the price of crude oil, stocks are turning in a mixed performance in early trading on Friday. The major averages have moved in opposite directions but are showing only modest changes.

Currently, the major averages remain mixed. While the S&P 500 is down 2.06 points or 0.1 percent at 2,070.77, the Dow is up 41.27 points or 0.2 percent at 17,869.02 and the S&P 500 is up 9.40 points or 0.2 percent at 4,796.72.

The mixed performance on Wall Street comes as crude for January delivery is plunging $4.31 to $69.38 a barrel after hitting a four-year low of $67.75 a barrel.

The steep decline by the price of oil comes amid news that the powerful Organization of Petroleum Exporting Countries said it won't cut production levels despite the recent drop in prices.

Saudi Arabian oil minister Ali Al-Naimi said OPEC would maintain its oil production target at 30 million barrels per day.

"With another sharp drop in oil prices, consumers and transportation companies rejoice and the BoJ, ECB, BoE and Fed stew that their inflation targets are now more difficult to achieve," said Peter Boockvar, managing director at the Lindsey Group.

At the same time, Boockvar noted, "The U.S. oil and gas industry, one of the fastest growing and vibrant areas of the U.S. economy over the past 5 years, is potentially on the cusp of a major slowdown."

Energy stocks are moving sharply lower amid the plunge in oil prices, with the Philadelphia Oil Service Index and the NYSE Arca Oil & Gas Index plummeting by 8.4 percent and 6.4 percent, respectively.

On the other hand, airline stocks are seeing substantial strength amid optimism about lower fuel prices. The NYSE Arca Airline Index has surged up by 4.6 percent to a twelve-year intraday high.

Trucking and retail stocks are also seeing some strength in early trading, although most of the major sectors are showing only modest moves.

Activity in today's abbreviated trading session is likely to be somewhat subdued, with many traders remaining away from their desks following the Thanksgiving Day holiday on Thursday.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index surged up by 1.2 percent, while Australia's All Ordinaries Index tumbled by 1.6 percent.

Meanwhile, the major European markets have all moved modestly lower on the day. While the U.K.'s FTSE 100 Index has edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index are down by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries are seeing modest strength, extending a recent upward move. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.3 basis points at 2.211 percent.