Major Averages Pull Back Sharply To Close Firmly In The Red

(RTTNews) - After moving sharply higher early in the session, stocks showed a substantial downturn over the course of the trading day on Wednesday. With the pullback on the day, the markets partly offset the rally that was seen in the previous session.

The initial upward move on Wall Street partly reflected a positive reaction to continued strength in the overseas markets, including additional gains by Chinese stocks.

Buying interest waned not long after the start of trading, however, as traders seemed reluctant to continue picking up stocks amid a lack of major U.S. economic data.

The subsequent pullback by the markets was partly due to a steep drop by the price of crude oil, with crude for October delivery tumbling $1.79 to $44.15 a barrel.

Oil service stocks saw substantial weakness amid the drop in oil prices, dragging the Philadelphia Oil Service Index down by 2.9 percent.

Significant weakness was also visible among gold stocks, which moved lower along with the price of gold. With gold for December delivery slumping $19 to $1,102 an ounce, the NYSE Arca Gold Bugs Index dropped by 3 percent.

Profit taking also contributed to considerable weakness among semiconductor, biotechnology, and software stocks, which turned in some of the best performances on Tuesday.

Most of the other major sectors also came under pressure on the day, reflecting the broad based weakness that emerged on Wall Street.

The major averages ended the day firmly in the red, just off their lows for the session. The Dow tumbled 239.11 points or 1.5 percent to 16,253.57, the Nasdaq fell 55.40 points or 1.2 percent to 4,756.53 and the S&P 500 dropped 27.37 points or 1.4 percent to 1,942.04.