Stocks Come Under Pressure Amid Renewed Ukraine Worries - U.S. Commentary

(RTTNews) - After failing to sustain an initial upward move, stocks moved notably lower over the course of the trading day on Wednesday. The major averages more than offset the gains posted in the previous session, with the Nasdaq falling to its lowest closing level in well over a month.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow fell 98.89 points or 0.6 percent to 16,268.99, the Nasdaq tumbled 60.69 points or 1.4 percent to 4,173.58 and the S&P 500 slid 13.06 points or 0.7 percent to 1,852.56.

A number of analysts attributed the pullback by stocks to a negative reaction to comments from President Barack Obama regarding the situation in Ukraine.

In remarks in Brussels after meeting with European Union and NATO allies, Obama warned the international community against adopting a complacent attitude toward Russian aggression in Ukraine, arguing that world leaders have a responsibility to uphold international norms.

Instead, Obama argued that Russia's assault on Ukraine's sovereignty and territorial integrity must be met with condemnation.

The president once again warned of expanded sanctions targeting key sectors of the Russian economy if President Vladimir Putin continues to escalate the situation.

While the sentiment expressed by Obama was not particularly new, the market reaction suggests that traders remain concerned about the crisis in Ukraine.

Ongoing uncertainty about the economic outlook may also have weighed on stocks following the release of the Commerce Department's report on durable goods orders.

The report said durable goods orders surged up by 2.2 percent in February following a revised 1.3 percent decrease in January, while economists had expected orders to increase by about 1.0 percent.

However, when excluding a jump in orders for transportation equipment, durable goods orders inched up by just 0.2 percent in February compared to economist estimates for a 0.3 percent increase.

The slightly smaller than expected increase in ex-transportation orders combined with a drop by a reading on business spending added to recent confusion about the state of the economy.

Among individual stocks, Facebook (FB) moved to the downside after the social media giant agreed to acquire Oculus VR, a developer of virtual reality technology, for approximately $2 billion. The price includes $400 million in cash and 23.1 million shares of Facebook common stock.

Sector News

Gold stocks moved sharply lower over the course of the trading day, dragging the NYSE Arca Gold Bugs Index down by 3.7 percent. The drop extended a recent downward trend by the index, which ended the session at its worst closing level in well over a month.

The weakness among gold stocks came amid a decrease by the price of the precious metal, with gold for April delivery falling $8 to $1,303.40 an ounce.

Significant weakness also emerged among biotechnology stocks, which were also adding to recent losses. The NYSE Arca Biotechnology Index tumbled by 2 percent and also hit a monthly closing low.

Electronic storage stocks also saw considerable weakness on the day, resulting in a 2 percent drop by the NYSE Arca Disk Drive Index. Hutchinson Technology (HTCH) and Imation (IMN) turned in two of the sector's worst performances.

Most of the other major sectors also came under pressure as the day progressed, with brokerage, transportation and networking stocks posting notable losses.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index closed just above the unchanged line, the French CAC 40 Index climbed by 0.9 percent and the German DAX Index jumped by 1.2 percent.

In the bond market, treasuries moved moderately higher in reaction to a solid five-year note auction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 2.701 percent.

Looking Ahead

Economic data may attract some attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims and pending home sales.

The Commerce Department is also scheduled to release its final report on fourth quarter GDP, although the data is likely to be viewed as old news.