Stocks Moving Back To The Downside In Early Trading - U.S. Commentary

(RTTNews) - Stocks have moved mostly lower in early trading on Thursday, giving back some ground following the strong performance seen last year. The major averages have all moved to the downside, with the Dow and the S&P 500 pulling back off record highs.

The major averages have recently climbed off their lows for the young session but remain in the red. The Dow is down 89.51 points or 0.5 percent at 16,487.15, the Nasdaq is down 29.50 points or 0.7 percent at 4,147.09 and the S&P 500 is down 10.72 points or 0.6 percent at 1,837.64.

The early weakness on Wall Street is partly due to profit taking, with traders cashing in on some of the recent strength in the markets.

Concerns about the outlook for the global economy are also weighing on the markets following the release of a report showing that growth in Chinese manufacturing activity slowed in December.

Final estimates released by HSBC and Markit Economics showed that their index of Chinese manufacturing activity fell to a 3-month low of 50.5 in December from 50.8 in November.

In U.S. economic news, the Labor Department released a report showing that initial jobless claims fell in line with economist estimates in the week ended December 28th.

The report said initial jobless claims dipped to 339,000, a decrease of 2,000 from the previous week's revised figure of 341,000. The figure from the previous week was upwardly revised from the 338,000 originally reported.

Meanwhile, the Institute for Supply Management released a report showing a slight slowdown in the pace of manufacturing growth in December.

The ISM said its purchasing managers index edged down to 57.0 in December from 57.3 in November, with a reading above 50 indicating growth in the manufacturing sector. The modest decrease by the index matched economist estimates.

A separate report released by the Commerce Department showing that construction spending rose in line with economist estimates in the month of November.

Tobacco stocks are seeing significant weakness in early trading, dragging the NYSE Arca Tobacco Index down by 2 percent. Universal (UVV) and Alliance One (AOI) are posting notable losses.

Computer hardware, steel, and semiconductor stocks have also come under pressure, while gold stocks are bucking the downtrend amid an increase by the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Hong Kong's Hang Seng Index edged up by 0.1 percent, while China's Shanghai Composite Index dipped by 0.3 percent. The Japanese markets remained closed.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.3 percent, the German DAX Index and the French CAC 40 Index are down by 1.2 percent and 1.3 percent, respectively.

In the bond market, treasuries are seeing modest strength after trending lower in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.4 basis points at 3.002 percent.