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U.S. Stocks Recover From Early Weakness To Finish Mixed

wallstreet3 23jan20 lt

After moving to the downside early in the session, stocks showed a notable rebound over the course of the trading day on Thursday. The major averages climbed well off their lows of the session, with the Nasdaq and the S&P 500 reaching positive territory.

The major averages finished the day mixed, as the Dow climbed off its worst levels but still closed in the red. While the Dow edged down 26.18 points or 0.1 percent to 29,160.06, the Nasdaq rose 18.71 points or 0.2 percent to 9,402.48 and the S&P 500 inched up 3.79 points or 0.1 percent to 3,325.54.

Lingering concerns about the impact of the Chinese coronavirus generated early selling pressure on Wall Street after contributing to a sell-off in the Asia-Pacific markets.

Despite efforts to contain the outbreak, deaths from the new coronavirus have risen to 17, with nearly 600 cases confirmed worldwide.

However, stocks showed a notable recovery after the World Health Organization said it is still too early to declare the outbreak a Public Health Emergency of International Concern.

"Make no mistake, this is an emergency in China. But it has not yet become a global health emergency," said WHO Director-General Tedros Adhanom Ghebreyesus.

The WHO noted an emergency committee stands ready to be reconvened to reconsider formally declaring the situation a PHEIC.

"At this time, there is no evidence of human-to-human transmission outside China, but that doesn't mean it won't happen," Tedros said.

A steep drop by shares of Travelers (TRV) helped keep the Dow in the red after the insurance giant reported fourth quarter earnings and revenues that beat estimates but slightly weaker than expected net premiums written.

In U.S. economic news, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended January 18th.

The report said initial jobless claims rose to 211,000, an increase of 6,000 from the previous week's revised level of 205,000.

Economists had expected jobless claims to climb to 215,000 from the 204,000 originally reported for the previous week.

Meanwhile, a separate report from the Conference Board showed a slightly bigger than expected decrease by its index of leading U.S. economic indicators.

The Conference Board said its leading economic index fell by 0.3 percent in December after inching up by a revised 0.1 percent in November

Economists had expected the leading economic index to dip by 0.2 percent compared to the unchanged reading originally reported for the previous month.

Sector News

Transportation stocks showed a significant move to the upside over the course of the session, driving the Dow Jones Transportation Average up by 1.3 percent.

Considerable strength also emerged among housing stocks, as reflected by the 1.2 percent gain posted by the Philadelphia Housing Sector Index.

On the other hand, oil service stocks saw substantial weakness on the day, dragging the Philadelphia Oil Service Index down by 1.7 percent.

The weakness among oil service stocks came amid another sharp drop by the price of crude oil, with crude for March delivery tumbling $1.15 to $55.59 a barrel.

Tobacco stocks also showed a notable move to the downside, resulting in a 1.4 percent slump by the NYSE Arca Tobacco Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw significant weakness during trading on Thursday. Japan's Nikkei 225 Index slumped by 1 percent, while China's Shanghai Composite Index plunged by 2.8 percent.

The major European markets also moved to the downside on the day. While the French CAC 40 Index fell by 0.7 percent, the U.K.'s FTSE 100 Index and the German DAX Index both slid by 0.9 percent.

In the bond market, treasuries pulled back off their best levels but still managed to finish the session higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 1.740 percent.

Looking Ahead

Amid a quiet day on the U.S. economic front, trading on Friday may be impacted by reaction to the latest batch of earnings news.

Semiconductor giant Intel (INTC) is among the companies releasing their quarterly results after the close of today's trading, while American Express (AXP) is due to report its results before the start of trading on Friday.

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