Stocks Give Back Ground After Seeing Initial Strength - U.S. Commentary

(RTTNews) - After failing to sustain an initial upward move, stocks have moved moderately lower over the course of early trading on Tuesday. The major averages have pulled back into negative territory, partly offsetting the strong gains posted last Friday.

In recent trading, the major averages have climbed off their lows for the young session, but they are currently in the red. The Dow is down 45.11 points or 0.3 percent at 17,466.46, the Nasdaq is down 2.74 points or 0.1 percent at 4,631.65 and the S&P 500 is down 2.27 points or 0.1 percent at 2,017.15.

A sharp drop by the price of crude oil is contributing to the early weakness that has emerged on Wall Street, as crude for February delivery is tumbling $2.34 to $46.35 a barrel.

The steep decline by the price of crude oil has led to notable weakness among energy stocks, with the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index falling by 1.7 percent and 2.2 percent, respectively.

Early weakness has also emerged among brokerage stocks, resulting in a 4.2 percent sell-off by the NYSE Arca Broker/Dealer Index.

Retail currency broker FXCM (FXCM) is posting a substantial loss after revealing further details of its emergency loan from Leucadia National (LUK).

Housing stocks have also come under pressure following the release of a report from the National Association of Home Builders showing a modest drop in homebuilder confidence in the month of January.

The report said the NAHB/Wells Fargo Housing Market Index edged down to 57 in January from an upwardly revised 58 in December.

Economist had expected the housing market index to inch up to 58 from the 57 originally reported for the previous month.

On the other hand, gold and airlines stocks have shown strong moves to the upside, partly offsetting the weakness in the aforementioned sectors.

Gold stocks are moving higher along with the price of the precious metal, while Delta (DAL) is leading the airline sector higher after reporting better than expected fourth quarter earnings.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

The major European markets are also seeing some strength on the day. While the French CAC 40 Index has jumped by 1.2 percent, the U.K.'s FTSE 100 Index is up by 0.4 percent and the German DAX Index is just above the unchanged line.

In the bond market, treasuries are moving back to the upside after ending last Friday's trading in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3 basis points at 1.785 percent.