Stocks Close Mostly Lower But Well Off Worst Levels - U.S. Commentary

(RTTNews) - After moving sharply lower for much of the trading day on Wednesday, stocks staged a significant recovery attempt going to the close. The major averages climbed well off their lows for the session but still ended the day in the red.

While the Dow finished the session down 173.45 points or 1.1 percent at 16,141.74, the blue chip index had been down as much as 460 points. The Nasdaq edged down 11.85 points or 0.3 percent to 4,215.32, and the S&P 500 slid 15.21 points or 0.8 percent to 1,862.49.

Despite the late-day recovery by the major averages, the Dow and the S&P 500 still ended the day at a new six-month closing lows.

The weakness seen for most of the day reflected ongoing concerns about global economic growth as well as news of the third confirmed case of Ebola in the United States.

Officials said a second health care worker has tested positive for the disease at the hospital that cared for the first Ebola patient diagnosed in the U.S.

Disappointing U.S. economic data also weighed on the markets, with a report from the Commerce Department showing a bigger than expected drop in retail sales.

The report said retail sales fell by 0.3 percent in September after climbing by 0.6 percent in August. Economists had been expecting sales to edge down by just 0.1 percent.

Excluding a pullback in auto sales, retail sales dipped by 0.2 percent in September compared to a 0.3 percent increase in the previous month. Ex-auto sales had been expected to rise by another 0.3 percent.

A separate report released by the Federal Reserve Bank of New York showed that business activity in the New York manufacturing sector grew at a substantially slower rate in the month of October.

The Labor Department also released a report showing an unexpected drop in producer prices in the month of September, reflecting lower prices for food and energy.

Among individual stocks, shares of Intel (INTC) ended the day down by 2.7 percent even though the semiconductor giant reported better than expected third quarter results.

Oil and natural gas producer Apache (APA) also posted a notable loss following news that its Chief Financial Officer Alfonso Leon has resigned to pursue other opportunities.

Meanwhile, shares of Ann (ANN) surged higher after the women's apparel retailer announced it has signed a confidentiality agreement with private equity firm Golden Gate Capital.

Sector News

Despite the volatility shown by the broader markets, banking stocks saw considerable weakness throughout the session. The Dow Jones Banks Index plunged by 3.4 percent to its lowest closing level in almost five months.

KeyCorp (KEY) helped to lead the banking sector lower, tumbling by 5.8 percent after reporting weaker than expected third quarter results.

Bank of America (BAC) also came under pressure despite reporting a narrower than expected third quarter loss.

Significant weakness was also visible among utilities stocks, as reflected by the 1.3 percent loss posted by the Dow Jones Utilities Average. PSEG (PEG) and CenterPoint Energy (CNP) turned in two of the sector's worst performances.

Retail, tobacco, and steel stocks also saw notable weakness on the day but ended the session well off their worst levels of the session.

Meanwhile, strength that emerged among energy, housing, and networking stocks contributed to the late-day recovery attempt by the major averages.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

Meanwhile, the major European markets moved sharply lower on the day. While the French CAC 40 Index plunged by 3.6 percent, the German DAX Index and the U.K.'s FTSE 100 Index plummeted by 2.9 percent and 2.8 percent, respectively.

In the bond market, treasuries showed a substantial move to the upside amid the weakness on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 11.6 basis points to 2.09 percent.

Looking Ahead

Another batch of U.S. economic data may attract attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, industrial production, homebuilder confidence, and Philadelphia-area manufacturing activity.

Trading could also be impacted by reaction to earnings news from American Express (AXP), eBay (EBAY), and Netflix (NFLX), which are releasing their quarterly results after the close of today's trading.

Additionally, Delta Air Lines (DAL), Goldman Sachs (GS), Mattel (MAT), and UnitedHealth (UNH) are among the companies due to report their results before the start of trading on Thursday.