U.S. Stocks Climb Well Off Worst Levels But Close Mostly Lower

After moving sharply lower early in the session, stocks regained some ground over the course of the trading day on Thursday but still closed in negative territory. With the drop on the day, the Dow pulled back off yesterday’s record closing highs.

The major averages finished the day well off their lows but stuck in the red. The Dow fell 119.68 points or 0.4 percent to 31,493.34, the Nasdaq slid 100.14 points or 0.7 percent to 13,865.36 and the S&P 500 dropped 17.36 points or 0.4 percent to 3,913.97.

A negative reaction to earnings news from Walmart (WMT) contributed to the early sell-off on Wall Street, with the retail giant plunging by 6.5 percent.

The steep drop by Walmart came after the company reported weaker than expected fourth quarter earnings and warned of slowing sales growth in the coming year.

The weakness on Wall Street also came following the release of a Labor Department report showing initial jobless claims came in well above economist estimates in the week ended February 13th, with claims rising from a significantly upwardly revised level.

The report said initial jobless claims edged up to 861,000, an increase of 13,000 from the previous week’s revised level of 848,000.

Economists had expected jobless claims to dip to 765,000 from the 793,000 originally reported for the previous week.

Traders have recently viewed disappointing jobs data as positive for the markets amid expectations it will put further pressure on lawmakers to pass additional stimulus.

However, traders may now see the prospect of more stimulus as priced into the markets, inspiring them to use the data to cash in on the recent strength in the markets.

A separate report from the Commerce Department showed housing starts pulled back by much more than expected in the month of January.

The Labor Department also released a report showing a bigger than expected jump in import prices, which may have added to recent inflation concerns.

Sector News

Energy stocks turned in some of the market’s worst performances on the day amid pullback by the price of crude oil. Crude for March delivery slid $0.62 to $60.52 a barrel after ending the previous session at its highest closing level in over a year.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 4.2 percent, the NYSE Arca Natural Gas Index tumbled by 3.5 percent and the NYSE Arca Oil Index slumped by 2.3 percent.

Considerable weakness was also visible among gold stocks, as reflected by the 1.6 percent drop by the NYSE Arca Gold Bugs Index. The weakness in the gold sector came despite a modest increase by the price of the precious metal.

Biotechnology stocks also showed a significant move to the downside, dragging the NYSE Arca Biotechnology Index down by 1.6 percent.

Telecom, steel and brokerage stocks also saw notable weakness on the day, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slipped by 0.2 percent, while Hong Kong’s Hang Seng Index plunged by 1.6 percent.

The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index tumbled by 1.4 percent, the French CAC 40 Index slid by 0.7 percent and the German DAX Index dipped by 0.2 percent.

In the bond market, treasuries moved modestly higher over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 1.287 percent.

Looking Ahead

Following the slew of U.S. economic data released this morning, a report on existing home sales in the month of January may attract some attention on Friday.

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