Stocks are seeing notable weakness in mid-day trading on Thursday, pulling back further off their recent highs following the substantial downward move seen in the previous session. Nonetheless, selling pressure has waned from earlier in the session.
The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 57.06 points or 0.4 percent at 13,870.48, the Nasdaq is down 27.65 points or 0.9 percent at 3,136.76 and the S&P 500 is down 8.71 points or 0.6 percent at 1,503.24.
The weakness on Wall Street comes as traders continue to cash in on the recent strength in the markets, which lifted the major averages to multi-year closing highs on Tuesday.
Concerns about the outlook for monetary stimulus from the Federal Reserve are also weighing on stocks along with disappointing reports on weekly jobless claims and Philadelphia manufacturing activity.
Before the start of trading, the Labor Department released a report showing that initial jobless claims climbed to 362,000 in the week ended February 16th, an increase of 20,000 from the previous week's revised figure of 342,000.
Economists had been expecting jobless claims to rise to 359,000 from the 341,000 originally reported for the previous week.
Separately, the Philadelphia Federal Reserve said its index of current activity fell to a negative 12.5 in February from a negative 5.8 in January, with a negative reading indicating a contraction in regional manufacturing activity.
The drop by the Philly Fed index came as a surprise to economists, who had been expecting the index to climb to a positive 1.1. With the unexpected decrease, the Philly Fed Index fell to its lowest level since hitting a negative 12.8 in June of 2012.
On the other hand, the National Association of Realtors released a report showing that existing home sales saw a modest rebound in January.
NAR said existing home sales rose 0.4 percent to a seasonally adjusted annual rate of 4.92 million in January after falling 1.2 percent to a downwardly revised 4.90 million in December.
Among individual stocks, Wal-Mart (WMT) is up by 3 percent after the retail giant reported better than expected fourth quarter earnings but noted that U.S. sales got off to a slow start in February due largely to a delay in tax refund checks.
Oil service stocks are turning in some of the market's worst performances in mid-day trading, with the Philadelphia Oil Service Index down by 2.1 percent. The index is pulling back further off the eleven-month closing high it set last Thursday.
The weakness among oil service stocks comes amid a sharp drop by the price of crude oil, with crude for April delivery plunging $2.12 to $93.10 a barrel.
Considerable weakness also remains visible among networking stocks, as reflected by the 1.9 percent loss being posted by the NYSE Arca Networking Index. Alcatel-Lucent (ALU) and Ciena (CIEN) are posting notable losses.
Steel stocks have also come under pressure on the day, dragging the NYSE Arca Steel Index down by 1.8 percent. Semiconductor, chemical, and brokerage stocks are also seeing significant weakness.
On the other hand, gold stocks are regaining ground after falling sharply in recent sessions. The NYSE Arca Gold Bugs Index is up by 2.3 percent, bouncing off its worst closing level in over three years.
In overseas trading, stock markets across the Asia-Pacific region came under pressure on Thursday on the heels of the overnight weakness on Wall Street. Japan's Nikkei 225 Index fell by 1.4 percent, while Hong Kong's Hang Seng Index plummeted by 1.7 percent.
The major European markets also showed substantial moves to the downside. While the U.K.'s FTSE 100 Index tumbled by 1.6 percent, the German DAX Index and the French CAC 40 Index plunged by 1.9 percent and 2.3 percent, respectively.
In the bond market, treasuries are seeing considerable strength after ending the previous session nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.9 basis points at 1.972 percent.
by RTT Staff Writer
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