Late-Day Weakness Leads To Lower Close On Wall Street - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading day on Thursday before coming under pressure in late-day trading and closing mostly lower. Traders seemed reluctant to make significant moves as they continued to digest yesterday's monetary policy announcement as well as some mixed economic data.

The major averages moved to the downside going into the close, ending the day firmly in the red. The Dow fell 73.01 points 0.5 percent to 15,545.75, the Nasdaq dipped 10.91 points or 0.3 percent to 3,919.71 and the S&P 500 slid 6.77 points or 0.4 percent to 1,756.54.

The choppy trading seen for most of the session came as Wednesday's announcement from the Federal Reserve generated some uncertainty about the outlook for monetary policy.

While the Fed maintained the pace of its asset purchases at $85 billion a month as was widely expected, the accompanying statement was seen as less dovish than anticipated.

The statement raised concerns that the Fed might not delay plans to begin tapering its stimulus program for as long as previously anticipated.

On the economic front, the Labor Department released a report before the start of trading showing that initial jobless claims fell by less than expected in the week ended October 26th.

The report said initial jobless claims dipped to 340,000, a decrease of 10,000 from the previous week's unrevised figure of 350,000. Economists had expected jobless claims to fall to 335,000.

After several weeks of distortions, the Labor Department suggested that the latest numbers were clean, as California has addressed its technical issues and the federal government has reopened.

Meanwhile, MNI Indicators released a report showing a substantial acceleration in the pace of growth in Chicago-area business activity in the month of October.

MNI Indicators said the Chicago Business Barometer jumped to 65.9 in October from 55.7 in September, with a reading above 50 indicating growth in Chicago-area business activity. Economists had expected the index to edge down to 55.0.

Traders were also digesting mixed earnings news from big-name companies such as credit card giant Visa (V) and social media giant Facebook (FB).

Sector News

While most of the major sectors ended the day showing only modest moves, substantial weakness was visible among gold stocks. The NYSE Arca Gold Bugs Index plunged 4.1 percent, pulling back further off the one-month highs set on Monday.

The weakness among gold stocks came amid a sharp drop by the price of the precious metal, with gold for December delivery tumbling $25.60 to $1,323.70 an ounce.

Housing stocks also showed a significant move to the downside over the course of the session, dragging the Philadelphia Housing Sector Index down by 1.5 percent. With the loss, the index pulled back further off Tuesday's four-month closing high.

Trucking, banking, and electronic storage stocks also came under pressure, with Con-way (CNW) leading the trucking sector lower after reporting disappointing third quarter results.

Meanwhile, networking stocks turned in a strong performance on the day, resulting in a 1.7 percent gain by the NYSE Arca Networking Index. Alcatel-Lucent (ALU) jumped 16.1 percent on optimistic comments from CEO Michel Combes.

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 ended the day down by 0.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index fell by 0.7 percent, the French CAC 40 Index advanced by 0.6 percent and the German DAX Index rose by 0.3 percent.

In the bond market, treasuries moved modestly lower, extending the pullback seen late in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.5 basis points to 2.542 percent.

Looking Ahead

Trading on Friday is likely to be impacted by reaction to the Institute for Supply Management's report on national manufacturing activity in the month of October. Economists expect the ISM's manufacturing index to dip to 55.0 from 56.2.

Remarks from St. Louis Fed President James Bullard on the economy and monetary policy may also attract some attention.