Downturn In Oil Prices Leads To Pullback On Wall Street - U.S. Commentary

(RTTNews) - After moving mostly higher earlier in the session, stocks have given back ground over the course of the trading session on Wednesday. The major averages have pulled back well off their highs, with the Nasdaq showing a steep drop.

Currently, the major averages are turning in a mixed performance, as the Dow is clinging to a slim gain. The Dow is up 16.00 points or 0.1 percent at 17,584.00, while the Nasdaq is down 43.42 points or 0.9 percent at 5,054.82 and the S&P 500 is down 5.40 points or 0.3 percent at 2,058.19.

The early strength on Wall Street was partly due to a rebound in oil prices, with the price of crude oil bouncing off its lowest closing level in well over six years.

Crude for January delivery rose by nearly $1.50 a barrel following the release of a report from the Energy Information Administration showing a steep drop in crude oil inventories in the week ended December 4th.

The report said crude oil inventories tumbled by 3.6 million barrels, marking the first drop in crude oil stockpiles in nearly three months.

However, the price of oil has shown a substantial pullback since then, and crude for January delivery is currently down $0.33 at $37.18 a barrel.

While the downturn by the price of oil is weighing on the broader markets, the Dow is being supported by a standout gain by DuPont (DD).

Shares of DuPont are currently up by 12 percent amid reports the chemical giant is in merger talks with rival Dow Chemical (DOW), which has jumped 10.4 percent on the day.

Casino operator Wynn Resorts (WYNN) is also holding on to a strong gain on news its CEO Stephen Wynn bought more than 1 million shares of the company's stock on the open market.

Meanwhile, shares of Lululemon Athletica (LULU) have come under pressure after the athletic apparel company reported weaker than expected third quarter results and provided disappointing guidance.

Wholesale retailer Costco (COST) has also moved to the downside after reporting first quarter results that came in below analyst estimates.

Sector News

Biotechnology stocks have come under pressure on the day, contributing to the sharp pullback by the tech-heavy Nasdaq. Reflecting the weakness in the biotech sector, the NYSE Arca Biotechnology Index is down by 1.3 percent.

Novavax (NVAX), Juno Therapeutics (JUNO), and Cepheid (CEPH) are turning in some of the biotech sector's worst performances.

Significant weakness has also emerged among housing stocks, as reflected by the 1.2 percent loss being posted by the Philadelphia Housing Sector Index. The index has fallen to its lowest level in almost a month.

Internet, brokerage, and networking stocks have also moved to the downside, while considerable strength remains visible among chemical, steel, and energy stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1 percent, while Hong Kong's Hang Seng Index dropped by 0.5 percent.

The major European markets also ended the day on the downside. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the German DAX Index fell by 0.8 percent and French CAC 40 Index slid by 1 percent.

In the bond market, treasuries have climbed back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.243 percent.