Major Averages Close Mixed Following Choppy Trading Session - U.S. Commentary

(RTTNews) - While a steep drop by the price of crude oil generated some negative sentiment, stocks turned in a relatively lackluster performance during trading on Wednesday. The Dow and the S&P 500 eventually closed lower for the third straight session.

The major averages finished the day mixed. The Nasdaq crept up 3.62 points or 0.1 percent to 5,837.55, while the Dow fell 69.03 points or 0.3 percent to 20,855.73 and the S&P 500 dipped 5.41 points or 0.2 percent to 2,362.98.

The choppy trading on Wall Street came as traders looked ahead to the monthly jobs report due on Friday as well as next week's Federal Reserve meeting.

Expectations that the Fed will raise interest rates have increased recently, with CME Group's FedWatch tool indicating a 90.8 percent probability of a quarter-point rate hike.

Adding to expectations for an increase in rates, payroll processor ADP released a report showing a sharp jump in private sector employment in the month of February.

ADP said private sector employment surged up by 298,000 jobs in February after jumping by an upwardly revised 261,000 jobs in January.

Economists had expected employment to climb by about 190,000 jobs compared to the addition of 246,000 jobs originally reported for the previous month.

The spike in private sector employment in February marked the biggest monthly increase since January of 2006.

On Friday, the Labor Department is due to release its more closely watched monthly employment report for February, which includes both private and public sector jobs.

The report is expected to show that employment increased by about 195,000 jobs in February after jumping by 227,000 jobs in January. The unemployment rate is expected to dip to 4.7 percent from 4.8 percent.

Sector News

Energy stocks moved sharply lower over the course of the trading session, moving lower along with the price of crude oil.

Crude for April delivery plunged $2.86 to $50.28 a barrel following the release of a report showing a substantial increase in crude oil inventories last week.

Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index plummeted by 3.6 percent, the Philadelphia Oil Service Index slumped by 2.9 percent and the NYSE Arca Oil & Gas Index tumbled by 2.5 percent.

Considerable weakness was also visible among steel stocks, as reflected by the 2.5 percent loss posted by the NYSE Arca Steel Index. With the drop, the index fell to a two-month closing low.

Commercial real estate, railroad and utilities stocks also saw significant weakness on the day, while biotechnology stocks showed a strong move to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region once again turned in a mixed performance on Wednesday. Japan's Nikkei 225 Index dropped by 0.5 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

The major European markets also finished the day on opposite sides of the unchanged line. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index crept up by 0.1 percent and the German DAX Index closed just above the unchanged line.

In the bond market, treasuries moved to the downside, extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.1 basis points to 2.552 percent.

Looking Ahead

The European Central Bank's monetary policy announcement may attract attention on Thursday along with U.S. reports on weekly jobless claims and import and exports prices.

Retailers Sears (SHLD) and Staples (SPLS) are also due to release their quarterly results before the start of trading on Thursday.

Nonetheless, trading activity is likely to remain relatively subdued ahead of the release of the monthly jobs report on Friday.