Stocks Stage Late-Day Recovery Attempt But Close Mostly Lower - U.S. Commentary

(RTTNews) - After moving sharply lower in morning trading on Thursday, stocks regained some ground late in the day but still closed mostly negative. The Dow ended the session at a two-year closing low, while the Nasdaq and the S&P 500 once again ended the session at their lowest closing levels in well over a year.

The Nasdaq briefly climbed into positive territory in the final hour of trading but closed down 16.76 points or 0.4 percent at 4,266.84. The Dow tumbled 254.56 points or 1.6 percent to 15,660.18, and the S&P 500 slumped 22.78 points or 1.2 percent to 1,829.08.

The late-day volatility on Wall Street came as traders kept a close eye on the price of crude oil, which once again saw wild swings on the day.

Amid ongoing oversupply concerns, crude for March delivery tumbled $1.24 to end the regular trading day at a nearly thirteen-year closing low of $26.21 a barrel.

However, the price of crude oil rebounded in electronic trading after the United Arab Emirates' Energy Minister told Sky News Arabia OPEC members might be ready to cooperate on a cut in production.

Earlier in the session, stocks joined in a global sell-off, with overseas weakness weighing on Wall Street amid ongoing risk aversion.

Traders also kept an eye on remarks by Federal Reserve Chair Janet Yellen, who testified before the Senate Banking Committee in her second day on Capitol Hill.

During the question-and-answer portion of her appearance, Yellen acknowledged there is the chance of a recession ahead and said the Fed would not take the possibility of imposing negative interest rates off the table.

Meanwhile, traders largely shrugged off a report from the Labor Department showing a bigger than expected decrease in initial jobless claims in the week ended February 6th.

The report said initial jobless claims dropped to 269,000, a decrease of 16,000 from the previous week's unrevised level of 285,000. Economists had expected jobless claims to edge down to 281,000.

Sector News

Despite the late-day recovery attempt by the broader markets, substantial weakness remained visible among banking stocks. The Dow Jones Banks Index plunged by 4.3 percent to a nearly three-year closing low.

Bank of America (BAC), Citigroup (C), and Regions Financial (RF) turned in some of the sector's worst performances on the day.

Housing stocks also saw significant weakness, resulting in a 2.5 percent drop by the Philadelphia Housing Sector Index. With the decrease, the index fell to its lowest closing level in over a year.

Steel, natural gas, chemical and utilities stocks also saw notable weakness, ending the day in the red along with most of the other major sectors.

On the other hand, gold stocks showed a strong move to the upside along with the price of the precious metal. With gold for April delivery jumping $53.20 to $1,247.80 an ounce, the NYSE Arca Gold Bugs Index surged up by 7.1 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday, as the Japanese and Chinese markets remained closed for holidays. Hong Kong's Hang Seng Index plunged by 3.9 percent, playing catch up to the recent losses in the region after being closed for several days.

The major European markets also saw substantial weakness on the day. While the French CAC 40 Index plummeted by 4.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index tumbled by 2.9 percent and 2.4 percent, respectively.

In the bond market, treasuries moved notably higher but closed well off their best levels of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.1 basis points to 1.644 percent.

Looking Ahead

Following several quiet days on the U.S. economic front, trading on Friday may be impacted by the release of reports on retail sales, import and export prices, and consumer sentiment.

On the earnings front Activision Blizzard (ATVI), CBS (CBS), Groupon (GRPN), and Pandora (P) are among the companies releasing their quarterly results after the close of today's trading.