Major Averages Close Near Their Worst Levels After Seeing Initial Strength

(RTTNews) - After failing to sustain an initial upward move, stocks showed a substantial downturn over the course of the trading day on Wednesday. The losses on the day extended the sell-off seen in the previous session, with the Dow falling to its lowest closing level in over a month.

The sharp pullback by stocks was partly due to another steep drop by the price of crude oil, which fell to its lowest levels in almost six years.

Crude for March delivery plunged $1.78 on the day to $44.45 a barrel, hitting its lowest closing level since March of 2006.

Reflecting the steep drop by the price of crude oil, energy stocks saw substantial weakness throughout much of the trading session.

Oil service stocks posted particularly steep losses on the day, dragging the Philadelphia Oil Service Index down by 5.6 percent. With the loss, the index pulled back further toward the three-year closing low it set earlier this month.

Considerable weakness also emerged among gold stocks, as reflected by the 3.6 percent loss posted by the NYSE Arca Gold Bugs Index. The weakness in the sector came as gold for February delivery slid $5.80 to $1,285.90 an ounce.

Software stocks also came under significant selling pressure, extending the sharp drop seen in the previous session. The Dow Jones Software Index tumbled by 2.4 percent to its lowest closing level in over three months.

Biotechnology, financial, airline and chemical stocks also moved notably lower on the day, reflecting the broad based weakness that emerged on Wall Street.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow plunged 195.84 points or 1.1 percent to 17,191.37, the Nasdaq slumped 43.50 points or 0.9 percent to 4,637.99 and the S&P 500 tumbled 27.39 points or 1.4 percent to 2,002.16.