By RTT News,
January 02, 2014, 12:31:00 PM EDT
(RTTNews.com) - With traders cashing in on last year's strength, stocks have moved notably lower during the first trading day of 2014. After coming under pressure early in the session, the markets continue to see significant weakness in mid-day trading.
The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 124.76 points or 0.8 percent at 16,451.90, the Nasdaq is down 37.01 points or 0.9 percent at 4,139.58 and the S&P 500 is down 15.93 points or 0.9 percent at 1,832.43.
Profit taking is contributing to the weakness on Wall Street, with the Dow and the S&P 500 pulling back off the record closing highs set on Tuesday.
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 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, although a reading above 50 still indicates growth in the manufacturing sector. The modest decrease by the index matched economist estimates.
Meanwhile, 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.
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 have shown a substantial move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 2.3 percent. Universal (UVV) and Schweitzer-Mauduit (SVM) are turning in two of the sector's worst performances.
Considerable weakness has also emerged among steel stocks, with the disappointing Chinese data weighing on the sector. The NYSE Arca Steel Index is down by 2.4 percent, pulling back off the eleven-month closing high set on Tuesday.
Oil service, computer hardware, and telecom stocks are also seeing significant weakness, moving lower along with most of the other major sectors.
However, gold stocks are bucking the downtrend on the day, benefiting from a sharp increase by the price of the precious metal. With gold for February delivery jumping $22.30 to $1,224.60 an ounce, the NYSE Arca Gold Bugs Index has surged up by 2.8 percent.
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 all moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the German DAX Index and the French CAC 40 Index both tumbled by 1.6 percent.
In the bond market, treasuries are regaining some ground 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 3.9 basis points at 2.987 percent.
For comments and feedback: contact firstname.lastname@example.org