Stocks Close Roughly Flat Following Volatile Trading Day - U.S. Commentary

(RTTNews) - Stocks saw considerable volatility over the course of the trading session on Thursday after failing to sustain an initial upward move. The major averages showed big swings back and forth as the day progressed before closing roughly flat.

While the S&P 500 managed to close slightly higher, inching up 0.31 points or less than a tenth of a percent to 1,989.57, the Dow edged down 5.23 points or less than a tenth of a percent to 16,995.13 and the Nasdaq dipped 12.22 points or 0.3 percent to 4,662.16.

The volatility on Wall Street came as traders digested the European Central Bank's announcement of a package of stimulus measures designed to boost the struggling European economy.

The ECB reduced its various interest rates by 5 or 10 basis points and expanded its monthly asset purchase program by 20 billion euros.

Traders initially reacted positively to the moves after the ECB disappointed the markets by failing to provide further stimulus in December.

Jonathan Loynes, chief European economist at Capital Economics, said, "The Governing Council appears to have recognized the importance of not under-delivering again, as we had hoped it would."

However, the positive sentiment was partly offset as ECB President Mario Draghi said he does not anticipate the need for further rate cuts.

Volatility by the price of crude oil also contributed to the choppy trading, with crude for April delivery bouncing between a low of $37.21 a barrel and a high of $38.48 a barrel.

Crude for April delivery eventually finished the day down $0.45 at $37.84 a barrel after ending Wednesday's trading at a three-month closing high.

On the U.S. economic front, the Labor Department released a report showing a much bigger than expected pullback in initial jobless claims in the week ended March 5th.

The Labor Department said initial jobless claims dropped to 259,000, a decrease of 18,000 from the previous week's revised level of 277,000. Economists had expected jobless claims to edge down to 272,000.

With the bigger than expected decrease, jobless claims fell to their lowest level since hitting a matching number in the week ended October 17th.

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Biotechnology stocks showed a notable move to the downside, however, with the NYSE Arca Biotechnology Index falling by 1.1 percent. The index closed lower for the third straight day, pulling back further off Monday's one-month closing high

Electronic storage, software, and natural gas stocks also saw some weakness on the day, although selling pressure was somewhat subdued.

On the other hand, gold stocks showed a substantial move to the upside, driving the NYSE Arca Gold Bugs Index up by 3.7 percent. With the gain, the index ended the session at its best closing level in almost ten months.

The rally by gold stocks came amid an increase by the price of the precious metal, with gold for April delivery climbing $15.40 to $1,272.80 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Thursday. Japan's Nikkei 225 Index surged up by 1.3 percent, while China's Shanghai Composite Index tumbled by 2 percent.

Meanwhile, the major European markets all moved sharply lower over the course of the session. While the German DAX Index plunged by 2.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index slumped by 1.7 percent and 1.8 percent, respectively.

In the bond market, treasuries moved to the downside on the day, extending the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.7 basis points to 1.929 percent.

Looking Ahead

The U.S. economic calendar remains relatively quiet on Thursday, although the Labor Department is scheduled to release its report on import and export prices.