Stocks Move Mostly Lower After Seeing Early Volatility - U.S. Commentary

(RTTNews) - After showing a lack of direction earlier in the session, stocks are mostly lower in mid-day trading on Thursday. With the losses on the day, the major averages are extending the downward move seen over the four previous sessions.

Currently, the major averages are in negative territory but off their worst levels of the day. The Dow is down 58.15 points or 0.3 percent at 17,368.94, the Nasdaq is down 34.74 points or 0.8 percent at 4,604.58 and the S&P 500 is down 9.18 points or 0.5 percent at 2,002.09.

The weakness on Wall Street partly reflects a negative reaction to quarterly results from financial giants Bank of America (BAC) and Citigroup (C).

Before the start of trading, Bank of America and Citigroup both reported weaker than expected fourth quarter earnings, raising concerns about the outlook for the remainder of earnings season.

A downturn by the price of crude oil may also be weighing on the markets, with crude for February delivery sliding $0.66 to $47.82 a barrel after surging up as much as $2.79 a barrel earlier in the day.

Traders are also digesting a slew of U.S. economic data as well as news that the Swiss Central Bank scrapped its cap on the franc versus the euro.

The Labor Department released a report this morning showing that producer prices fell at their fastest rate in over three years in December, although the drop was still smaller than economists had expected.

The report said the producer price index for final demand fell by 0.3 percent in December, while economists had expected the index to decrease by 0.4 percent.

Excluding food and energy prices, the core producer price index rose by 0.3 percent in December after coming in unchanged in the previous month. The increase exceeded estimates for a 0.1 percent uptick.

The Labor Department also released a separate report showing that initial jobless claims jumped to their highest level in four months in the week ended January 10th.

Additionally, the New York and Philadelphia Federal Reserves released a pair of reports painting a mixed picture of activity in the manufacturing sector.

Sector News

Housing stocks have shown a significant move to the downside on the day, dragging the Philadelphia Housing Sector Index down by 2.8 percent. The index is pulling back further off the seven-year closing high it set on Monday.

Lennar (LEN) has helped to lead the housing sector lower, with the homebuilder tumbling by 5.7 percent after reporting better than expected fourth quarter earnings but forecasting a drop in margins.

Considerable weakness is also visible among banking stocks, as reflected by the 2.1 percent loss being posted by the Dow Jones Banks Index. With the loss, the index has fallen to its lowest intraday level in almost three months.

Bank of America and Citigroup are turning in two of the sector's worst performances, falling by 3.7 percent and 3 percent, respectively.

Networking, internet, and computer hardware stocks are also under pressure in mid-day trading, contributing to the notable drop by the tech-heavy Nasdaq.

On the other hand, gold stocks continue to see substantial strength on the day, with the NYSE Arca Gold Bugs Index surging up by 7.3 percent. The strength in the sector comes as gold for February delivery has shot up $28.60 to $1,263.10 an ounce.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific moved back to the upside during trading on Thursday. Japan's Nikkei 225 Index surged up by 1.9 percent, while China's Shanghai Composite Index soared by 3.5 percent.

The major European markets also saw significant strength on the day. While the U.K.'s FTSE 100 Index jumped by 1.7 percent, the German DAX Index and the French CAC 40 Index surged up by 2.2 percent and 2.4 percent, respectively.

In the bond market, treasuries are moving notably higher, extending a recent upward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price is down by 4.7 basis points at 1.79 percent.