Major Averages Climb Off Worst Levels But Close Firmly In The Red

(RTTNews) - After showing a lack of direction during the past few sessions, stocks moved sharply lower over the course of the trading day on Thursday. A disappointing reading on Chinese manufacturing activity contributed to the selling pressure.

Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 1.9 percent. The steep loss by the index came after it ended the previous session at its best closing level in over eleven years.

Southwest Airlines (LUV) turned in one of the airline sector's worst performances despite reporting better than expected fourth quarter results

Considerable weakness was also visible among oil service stocks, as reflected by the 1.7 percent loss posted by the Philadelphia Oil Service Index. Diamond Offshore (DO) and Tidewater (TDW) posted steep losses.

Banking stocks also saw significant weakness, resulting in a 1.6 percent loss by the Dow Jones Banks Index. Chemical, steel, brokerage, and trucking stocks also came under pressure.

Meanwhile, gold stocks moved sharply higher on the day, benefiting from a notable increase by the price of the precious metal. With gold for February delivery jumping $23.70 to $1,262.30 an ounce, the NYSE Arca Gold Bugs Index surged up by 2.7 percent.

Railroad stocks also bucked the downtrend by the broader markets, driving the Dow Jones Railroads Index up by 1.8 percent.

The major averages climbed well off their worst levels in afternoon trading but still closed firmly in the red. The Dow tumbled 175.99 points or 1.1 percent to 16,197.35, the Nasdaq slid 24.13 points or 0.6 percent to 4,218.87 and the S&P 500 dropped 16.40 points or 0.9 percent to 1,828.46.