Stocks Close Mostly Lower Amid Lingering Fed Worries - U.S. Commentary

(RTTNews) - While selling pressure was somewhat subdued, stocks moved mostly lower over the course of the trading day on Thursday. Concerns about the outlook for the Federal Reserve's stimulus program continued to weigh on the markets.

The major averages ended the day in the red, with the Dow and the S&P 500 closing lower for the fifth straight session. The Dow fell 68.26 points or 0.4 percent to 15,821.51, the Nasdaq edged down 4.84 points or 0.1 percent to 4,033.17 and the S&P 500 slid 7.78 points or 0.4 percent to 1,785.03.

The weakness on Wall Street came as the release of upbeat economic data added to recent worries that the Fed may soon begin tapering its asset purchase program.

Before the start of trading, the Labor Department released a report showing an unexpected drop in initial jobless claims in the week ended November 30th.

The report said initial jobless claims fell to 298,000, a decrease of 23,000 from the previous week's revised figure of 321,000. The drop surprised economists, who had expected jobless claims to climb to 322,000 from the 316,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level in almost three months, although the data was likely impacted by seasonal adjustments related to the Thanksgiving Day holiday.

A separate report from the Commerce Department showed that U.S. economic activity grew by much more than previously estimated in the third quarter of 2013.

The Commerce Department said U.S. gross domestic product increased by an upwardly revised 3.6 percent in the third quarter compared to the initial estimate of 2.8 percent growth. Economists had expected the pace of GDP growth to be revised to 3.1 percent.

Nonetheless, traders seemed somewhat reluctant to make any significant moves ahead of the release of the closely watched monthly jobs report on Friday.

Economists expect the report to show an increase of about 180,000 jobs in November compared to the addition of 204,000 jobs in October. The unemployment rate is expected to edge down to 7.2 percent.

Sector News

After regaining some ground in the previous session, gold stocks showed a substantial move back to the downside on the day. The NYSE Arca Gold Bugs Index tumbled by 2.7 percent, more than offsetting yesterday's gain and hitting a new five-year closing low.

The pullback by gold stocks came amid a decrease by the price of the precious metal, with gold for February delivery sliding $15.30 to $1,231.90 an ounce.

Banking stocks also came under pressure over the course of the session, dragging the Dow Jones Banks Index down by 1.3 percent. JP Morgan (JPM) and Citigroup (C) posted notable losses.

Significant weakness also emerged among software stocks, with Microsoft (MSFT) leading the way lower amid indications that Ford (F) CEO Alan Mulally will not become the software giant's new chief executive.

Telecom and utilities stocks also moved to the downside on the day, while some strength was visible among networking and natural gas stocks.

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 1.5 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index dipped by 0.2 percent, the German DAX Index slid by 0.6 percent and the French CAC 40 Index fell by 1.2 percent.

In the bond market, treasuries saw modest weakness, extending the notable downward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 2.862 percent.

Looking Ahead

The monthly jobs report will be in spotlight on Friday, likely overshadowing the release of separate reports on personal income and spending and consumer sentiment.