Stocks Close Mixed Following Lackluster Trading Session - U.S. Commentary

(RTTNews) - Following the rally seen late in the previous session, stocks turned in a relatively lackluster performance during trading on Thursday. The major averages eventually ended the session mixed, as the tech-heavy Nasdaq clung to a modest gain for much of the day.

While the Nasdaq edged up 9.55 points or 0.2 percent to 4,992.38, the Dow and the S&P 500 both closed in the red. The Dow slid 117.16 points or 0.7 percent to 17,959.03, and the S&P 500 fell 10.23 points or 0.5 percent to 2,089.27.

The choppy trading on Wall Street came as traders continued to digest yesterday's monetary policy statement from the Federal Reserve.

The Fed statement was interpreted as dovish even though the central bank removed its pledge to remain "patient" regarding normalizing monetary policy.

In her subsequent press conference, Fed Chair Janet Yellen noted that removing the word patient from the statement doesn't mean the central bank is going to be impatient.

Traders also seemed to focus on the fact that the Fed lowered its outlook for interest rates at the end of this year.

The median projection for the mid-point of the fed funds target range at the end of 2015 is now 0.625 percent, down from the 1.125 percent projection made in December.

Traders initially reacted positively to the apparent dovishness of the Fed but now seem to be expressing some renewed uncertainty about the outlook for interest rates.

Peter Boockvar, managing director at the Lindsey Group, said, "I think it's fair to say that the concept of being 'data dependent' has now been officially neutered. It is no longer clear what data the Fed is most dependent on."

"It is also no longer clear at what levels the data needs to be for there to be a policy change. These levels have changed so many times already," he added. "We have 'fly by the seat of your pants' monetary policy."

On the economic front, the Labor Department released a report showing a modest uptick in initial jobless claims in the week ended March 14th.

The report said initial jobless claims inched up to 291,000, an increase of 1,000 from the previous week's revised level of 290,000. Economists had expected jobless claims to rise to 293,000.

Sector News

Reflecting the lack of direction shown by the broader markets, many of the major sectors ended the day showing only modest moves.

Steel stocks saw substantial weakness, however, with the NYSE Arca Steel Index plunging by 3.5 percent. With the drop, the index pulled back toward the nearly six-year closing low set on Monday.

U.S. Steel (X), Nucor (NUE), and Cliffs Natural Resources (CLF) turned in some of the steel sector's worst performances on the day.

Significant weakness was also visible among energy stocks, which moved lower along with the price of crude oil. Crude for April delivery fell $0.70 to $43.96 a barrel.

Chemical, electronic storage, and banking stocks also saw notable weakness, while significant strength emerged among biotechnology stocks.

Reflecting the strength in the biotech sector, the NYSE Arca Biotechnology Index surged up by 1.7 percent to a new record closing high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday. Hong Kong's Hang Seng Index surged up by 1.4 percent, while Australia's All Ordinaries Index jumped by 1.8 percent. However, Japan's Nikkei 225 Index bucked the uptrend and fell by 0.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged down by 0.2 percent, the U.K.'s FTSE 100 rose by 0.3 percent and the French CAC 40 Index inched up by 0.1 percent.

In the bond market, treasuries turned lower over the course of the session after seeing modest strength in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 2.6 basis points to 1.977 percent.

Looking Ahead

Trading activity on Friday may be somewhat subdued amid a quiet day on the economic front, although speeches by two Fed officials may attract some attention.