By RTT News, February 25, 2013, 12:16:00 PM EDT
(RTTNews.com) - After moving moderately higher in early trading on Monday, stocks have shown a notable downturn over the course of the session. The pullback by the markets comes as the latest reports out of Italy have offset early optimism about the outcome of elections.
The major averages have pulled back well off their highs for the session and into negative territory. The Dow is down 65.04 points or 0.5 percent at 13,935.53, the Nasdaq is down 6.41 points or 0.2 percent at 3,155.41 and the S&P 500 is down 6.36 points or 0.4 percent at 1,509.24.
The downturn by U.S. stocks comes on the heels of projections from Italian television indicating that former Prime Minister Silvio Berlusconi's center-right party is slightly ahead in the Senate.
A victory for Berlusconi is seen as potentially damaging to Italian government stability, with the center-right party seen as likely to move the country away from austerity plans.
Earlier polls showing the center-left leading the elections helped to push stocks higher in early trading amid indications that a center-left led government would stick to the budget cuts instituted by outgoing Prime Minister Mario Monti.
The volatility on Wall Street also comes amid a lack of any major U.S. economic data, with some traders staying on the sidelines ahead of congressional testimony from Federal Reserve Chairman Ben Bernanke as well as key reports on new home sales, durable goods orders, and manufacturing activity.
Uncertainty about whether lawmakers in Washington will be able to reach an agreement to avoid the automatic government spending cuts due to go into effect at the end of the month is also contributing to choppy trading.
Last Friday, President Barack Obama said he remains hopeful that Congress will reach an agreement to avoid the spending cuts but noted that he has to convince lawmakers about the potential negative impacts of the cuts.
Electronic storage stocks have shown a notable move to the downside over the course of the session, dragging the NYSE Arca Disk Drive Index down by 1.7 percent. The loss extends a recent downward move by the index, which has fallen to a two-month intraday low.
STEC, Inc. ( STEC ) has helped to lead the storage sector lower, falling by 4 percent, while Western Digital ( WDC ) and Seagate Technology ( STX ) are also posting notable losses.
Considerable weakness has also emerged among housing stocks, as reflected by the 1.2 percent loss being posted by the Philadelphia Housing Sector Index. Toll Brothers ( TOL ) and Standard Pacific ( SPF ) are turning in two of the sector's worst performances.
Oil service, banking, and chemical stocks have also come under pressure, with a pullback by the price of crude oil weighing on the oil service sector.
Meanwhile, gold stocks are holding on to strong gains, benefiting from a notable increase by the price of the precious metal. With gold for April delivery climbing $16.50 to $1,589.30 an ounce, the NYSE Arca Gold Bugs Index is up by 1.8 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index surged up by 2.4 percent, while Australia's All Ordinaries Index advanced by 0.7 percent.
The major European markets also saw some strength on the day but closed well off their best levels. While the German DAX Index jumped 1.5 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index rose by 0.4 percent and 0.3 percent, respectively.
In the bond market, treasuries have turned higher after moving to the downside in early trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.8 basis points at 1.929 percent after reaching a high of 2.002 percent.
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