Stocks Move Mostly Lower Amid Pullback By Oil Prices - U.S. Commentary

(RTTNews) - Stocks have moved mostly lower in early trading on Wednesday, giving back some ground after ending the two previous sessions sharply higher. While the Dow is lingering near the unchanged line, the broader Nasdaq and S&P 500 have slid firmly into the red.

Currently, the major averages are all in negative territory, although the Dow is down only 1.89 points or less than a tenth of a percent at 17,664.51. The Nasdaq is down 23.01 points or 0.5 percent at 4,704.73, and the S&P 500 is down 7.76 points or 0.4 percent at 2,042.27.

The early weakness on Wall Street is partly due to a sharp pullback by the price of crude oil, which is moving back to the downside after spiking higher in the three previous sessions.

Crude for March delivery is currently tumbling $2.77 to $50.28 a barrel after ending the previous session at its highest closing level of the New Year.

Negative sentiment has also been generated by a report showing weaker than expected private sector job growth, with the data raising concerns about Friday's Labor Department report.

Payroll processor ADP said private sector employment increased by 213,000 jobs in January following an upwardly revised increase of 253,000 jobs in December. Economists had expected employment to climb by about 223,000 jobs.

Mark Zandi, chief economist of Moody's Analytics, said, "Employment posted another solid gain in January, although the pace of growth is slower than in recent months."

"Businesses in the energy and supplying industries are already scaling back payrolls in reaction to the collapse in oil prices, while industries benefiting from the lower prices have been slower to increase their hiring," he added.

Meanwhile, a separate report from the Institute for Supply Management showed a modest uptick by its index of activity in the service sector.

The ISM said its non-manufacturing index inched up to 56.7 in January from an upwardly revised 56.5 in December, with a reading above 50 indicating growth in the service sector.

Biotechnology stocks have shown a significant move to the downside in early trading, extending a recent downward move. The NYSE Arca Biotechnology Index has fallen by 2.6 percent, hitting its lowest intraday level in almost a month.

Gilead Sciences (GILD) and Myriad Genetics (MYGN) are leading the biotech sector lower after reporting their quarterly results.

Significant weakness has also emerged among steel stocks, as reflected by the 2 percent loss being posted by the NYSE Arca Steel Index. The index is giving back ground after moving notably higher over the past three sessions.

Trucking, energy, and healthcare stocks are also seeing early weakness, while airline stocks are turning in a strong performance on the day.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index shot up by 2 percent, while Hong Kong's Hang Seng Index rose by 0.5 percent.

Meanwhile, the major European markets are seeing some weakness on the day. While the U.K.'s FTSE 100 Index has fallen by 0.9 percent, the German DAX Index and the French CAC 40 Index are down by 0.4 percent and 0.2 percent, respectively.

In the bond market, treasuries have moved to the downside, extending the sell-off seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.1 basis points at 1.821 percent.