Stocks Move Back To The Downside In Early Trading - U.S. Commentary

(RTTNews) - Stocks have moved moderately lower in early trading on Thursday after showing big swings back and forth over the course of the two previous sessions. The major averages have slid into negative territory but remain well off Tuesday's lows.

In recent trading, the major averages have seen some further downside, hitting new lows for the young session. The Dow is down 92.53 points or 0.5 percent at 18,067.76, the Nasdaq is down 25.48 points or 0.5 percent at 5,081.11 and the S&P 500 is down 10.43 points or 0.5 percent at 2,113.05.

The early weakness on Wall Street partly reflects ongoing uncertainty about the situation in Greece following yesterday's mixed comments regarding the embattled nation's negotiations with its creditors.

While Greek Prime Minister Alexi Tsipras told reporters his government is close to an agreement to secure funding from its lenders, European Commission Vice President Valdis Dombrovskis said the two sides still have a ways to go.

The outcome of a meeting of G7 finance ministers in Dresden today and tomorrow could shed more light on how Greece's international creditors seek to end the impasse.

The downward momentum on Wall Street also comes on the heels of a sell-off in China, as the Shanghai Composite Index plummeted by 6.5 percent.

The weakness was seen as a reaction to announcements by several brokers concerning tightening requirements on margin financing ahead of an IPO influx next week.

A report from the National Association of Realtors showing a jump in pending home sales may also be weighing on the markets amid continued concerns about the outlook for interest rates.

NAR said its pending home sales index surged up 3.4 percent to 112.4 in April from a slightly upwardly revised 108.7 in March. Economists had expected the index to increase by about 0.8 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.

With the bigger than expected increase, the pending home sales index reached its highest level since hitting 112.5 in May of 2006.

Steel stocks have shown a significant move to the downside, dragging the NYSE Arca Steel Index down by 2 percent. The index has fallen to its lowest intraday level in over a month.

Considerable weakness has also emerged among oil service stocks, with the Philadelphia Oil Service Index falling by 1.7 percent. The weakness in the sector comes as crude oil for July delivery is sliding $0.42 to $57.09 a barrel.

Railroad, trucking, and natural gas stocks are also seeing early weakness, while electronic storage stocks are bucking the downtrend.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index plunged by 2.2 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has edged down by 0.1 percent, the German DAX Index is down by 0.8 percent and the French CAC 40 Index is down by 1.1 percent.

In the bond market, treasuries are showing a lack of direction after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.139 percent.