Stocks Remain Mostly Negative In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving to the downside early in the session, stocks remain mostly negative in mid-day trading on Tuesday. The S&P 500 is pulling back off yesterday's record closing high, although selling pressure has remained relatively subdued.

The major averages have moved roughly sideways in recent trading, stuck in the red. The Dow is down 47.26 points or 0.3 percent at 17,990.97, the Nasdaq is down 15.69 points or 0.3 percent at 4,791.22 and the S&P 500 is down 5.89 points or 0.3 percent at 2,084.68.

Weakness in the overseas markets is weighing on Wall Street, with stocks across both the Asia-Pacific region and Europe moving sharply lower on the day.

Concerns about the political situation in Greece contributed to the weakness in Europe after the country's parliament failed to elect a president.

Peter Boockvar, managing director at the Lindsey Group, said the biggest market risk is not what happens politically or economically in Greece but if the developments there impact what the European Central Bank wants to do going forward.

"The possibility of the Syriza party winning the January 25th election, 3 days after the ECB's next meeting, won't likely alter Draghi's plans for sovereign QE but it could complicate it," Boockvar said.

Worries about the impact that the recent drop in crude oil prices will have on the oil and gas industry is also generating some negative sentiment.

Reflecting the impact on the industry, Civeo (CVEO) said it has reduced headcount in its Canadian and U.S. operations by 30 percent and 45 percent, respectively, from levels at the beginning of 2014.

Civeo, which provides temporary and long-term housing for oil workers, also slashed its spending and suspended its dividend. Shares of Civeo have plunged by more than 50 percent on the day.

Meanwhile, traders have largely shrugged off a report from the Conference Board showing a rebound in consumer confidence in the month of December.

The Conference Board said its consumer confidence index climbed to 92.6 in December from an upwardly revised 91.0 in November.

Economists had expected the index to jump to a reading of 93.0 from the 88.7 originally reported for the previous month.

Sector News

After moving sharply higher over the past several sessions, utilities stocks are seeing notable weakness on the day. The Dow Jones Utilities Average is tumbling by 1.4 percent, pulling back off yesterday's record closing high.

AES Corp. (AES), American Water Works (AWK), and Dominion Resources (D) are turning in some of the utilities sector's worst performances in mid-day trading.

Significant weakness is also visible among natural gas stocks, as reflected by the 1.3 percent loss being posted by the NYSE Arca Natural Gas Index. Southwestern Energy (SWN) is leading the sector lower, plunging by 4.5 percent.

Oil service and oil producer stocks are also seeing notable weakness on the day even though the price of crude oil has turned modestly higher.

Meanwhile, gold stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 5 percent. The strength in the sector comes as gold for February delivery is jumping $22.10 to $1,204 an ounce.

Considerable strength has also emerged among airline stocks, with the NYSE Arca Airline Index climbing by 1.3 percent to a new twelve-year intraday high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index plunged by 1.6 percent, while Hong Kong's Hang Seng Index slumped by 1.1 percent.

The major European markets also came under pressure on the day. While the French CAC 40 Index tumbled by 1.7 percent, the U.K.'s FTSE 100 Index and the German DAX Index dropped by 1.3 percent and 1.2 percent, respectively.

In the bond market, treasuries are extending a recent upward move amid worries about the situation in Greece. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.3 basis points at 2.174 percent.