Stocks Close Modestly Lower But Well Off Worst Levels - U.S. Commentary

(RTTNews) - Stocks showed a notable recovery attempt after coming under pressure in early trading on Thursday but still ended the session modestly lower. With the drop, the tech-heavy Nasdaq pulled back off the record closing high set on Wednesday.

The major averages ended the day in negative territory but well off their lows of the session. The Dow fell 63.28 points or 0.3 percent to 19,891.00, the Nasdaq dipped 16.16 points or 0.3 percent to 5,547.49 and the S&P 500 edged down 4.88 points or 0.2 percent to 2,270.44.

Profit taking contributed to the early weakness on Wall Street, with traders cashing in on some of the strength seen in the weeks following President-elect Donald Trump's surprise victory.

Analysts suggested that the pullback was partly due to continued uncertainty about Trump's policies following his highly-anticipated press conference on Wednesday.

The World Bank noted Trump's proposed tax cuts and spending plans could boost U.S. and global growth but said uncertainty about his trade policies adds to risks.

During the press conference, Trump lashed out at the drug industry and called for new bidding procedures in order to lower prices.

Stocks did not sustain the early downward, however, with the subsequent rebound possibly reflecting trader concerns about missing out on any further upside.

On the U.S. economic front, the Labor Department released a report showing a modest rebound in initial jobless claims in the week ended January 7th.

The report said initial jobless claims rose to 247,000, an increase of 10,000 from the previous week's revised level of 237,000. Economists had expected jobless claims to climb to 255,000.

A separate Labor Department report showed a smaller than expected rebound in import prices in the month of December.

Sector News

Most of the major sectors climbed well off their worst levels of the day, contributing to the recovery attempt by the broader markets.

Significant weakness remained visible among computer hardware stocks, however, with the NYSE Arca Computer Hardware Index falling by 1.2 percent.

Cray (CRAY) and Supermicro (SMCI) turned in two of the hardware sector's worst performances, slumping by 3.6 percent and 3.5 percent, respectively.

Financial, airline, and semiconductor stocks also ended the day notably lower, while biotechnology stocks regained some ground after falling sharply on Wednesday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index tumbled by 1.2 percent, while Hong Kong's Hang Seng Index fell by 0.5 percent.

European stocks also moved mostly to the downside on the day, with the French CAC 40 Index falling by 0.5 percent and the German DAX Index slumping by 1.1 percent. However, the U.K.'s FTSE 100 Index closed just above the unchanged line.

In the bond market, treasuries once again closed nearly flat after an early move to the upside faded. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.361 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to closely watched reports on producer prices and retail sales in the month of December.

Financial giants Bank of America (BAC), JPMorgan (JPM), and Wells Fargo (WFC) are also due to report their quarterly results before the start of trading on Friday.