Stocks Move Notably Lower Amid Steep Drop By Crude Oil - U.S. Commentary

(RTTNews) - Stocks have moved notably lower over the course of the trading day on Monday after showing a lack of direction earlier in the session. The major averages have slid firmly into negative territory, with the Dow and the S&P 500 pulling back well off last Friday's record highs.

In recent trading, the major averages have seen some further downside, hitting new lows for the session. The Dow is down 142.56 points or 0.8 percent at 17,816.23, the Nasdaq is down 54.29 points or 1.1 percent at 4,726.46 and the S&P 500 is down 19.63 points or 1 percent at 2,055.74.

The weakness that has emerged on Wall Street is partly due to a sharp drop by the price of crude oil, which is weighing heavily on energy stocks.

Crude for January delivery is down $2.53 at $63.31 a barrel after hitting a low of $63.06 a barrel, its lowest level since July of 2009.

Reflecting the weakness in the energy sector, the NYSE Arca Oil & Gas Index, the Philadelphia Oil Service Index, and the NYSE Arca Natural Gas Index are all plummeting by more than 4 percent.

Substantial weakness has also emerged among railroad stocks, as reflected by the 3.6 percent loss being posted the Dow Jones Railroads Index.

The railroad index has pulled back sharply in recent sessions amid concerns about the impact the drop in the price of oil will have on the industry.

Computer hardware, internet, and semiconductor stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

On the other hand, gold stocks have shown a substantial turnaround over the course of the session after coming under pressure in morning trading. The NYSE Arca Gold Bugs Index has surged up by 1.7 percent after falling as much as 2.7 percent.

Biotechnology stocks also continue to see notable strength, with Cubist Pharmaceuticals (CBST) posting a standout gain after agreeing to be acquired by Merck (MRK) in a deal valued at $9.5 billion.

Earlier in the session, selling pressure was generated by renewed worries about the global economy following the release of some disappointing economic data from overseas.

A revised report released by Japan's Cabinet Office showed that Japanese GDP contracted by 1.9 percent year-over-year in the third quarter, faster than the 1.6 percent drop initially estimated and the 0.5 percent decline expected by economists.

Disappointing Chinese trade data also generated some negative sentiment, with a report showing notably slower export growth and an unexpected drop in imports.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index inched up by 0.1 percent and 0.2, respectively, while South Korea's KOSPI Index dropped by 0.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index fell by 0.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index tumbled by 1 percent and 1.1 percent, respectively.

In the bond market, treasuries have moved steadily higher over the course the session after ending last Friday's trading sharply lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.3 basis points at 2.264 percent.