Stocks Seeing Considerable Volatility In Early Trading - U.S. Commentary

(RTTNews) - With traders digesting the European Central Bank's monetary policy announcement, stocks have seen considerable volatility in early trading on Thursday. The major averages have thus far been unable to sustain any significant moves.

Currently, the major averages are posting modest losses on the day. The Dow is down 41.22 points or 0.2 percent at 16,959.14, the Nasdaq is down 11.50 points or 0.3 percent at 4,662.87 and the S&P 500 is down 3.29 points or 0.2 percent at 1,985.97.

The choppy trading on Wall Street comes on the heels of the ECB's announcement of a package of stimulus measures designed to boost the struggling European economy.

The ECB reduced its various interest rates by 5 or 10 basis points and expanded its monthly asset purchase program by 20 billion euros.

Investors initially reacted positively to the moves after the ECB disappointed the markets by failing to provide further stimulus in December.

Jonathan Loynes, chief European economist at Capital Economics, said, "The Governing Council appears to have recognized the importance of not under-delivering again, as we had hoped it would."

In his subsequent press conference, ECB President Mario Draghi said rates are likely to remain at low levels for an extended prior of time but said he does not anticipate the need for further rate cuts.

Draghi said the risks to growth remain tilted to the downside, citing heightened uncertainties regarding developments in the global economy as well as to broader geopolitical risks.

On the U.S. economic front, the Labor Department released a report showing a much bigger than expected pullback in initial jobless claims in the week ended March 5th.

The Labor Department said initial jobless claims dropped to 259,000, a decrease of 18,000 from the previous week's revised level of 277,000. Economists had expected jobless claims to edge down to 272,000.

With the bigger than expected decrease, jobless claims fell to their lowest level since hitting a matching number in the week ended October 17th.

Most of the major sectors are showing only modest moves on the day, contributing to the lack of direction being shown by the broader markets.

Gold stocks are seeing substantial strength, however, with the NYSE Arca Gold Bugs Index surging up by 1.9 percent. The strength in the sector comes as gold for April delivery is climbing $8.80 to $1,266.20 an ounce.

On the other hand, energy stocks have shown a notable move to the downside, as crude oil for April delivery is sliding $0.62 to $37.67 a barrel.

The NYSE Arca Natural Gas Index has tumbled by 2 percent, while the Philadelphia Oil Service Index is down by 1.5 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Thursday. Japan's Nikkei 225 Index surged up by 1.3 percent, while China's Shanghai Composite Index tumbled by 2 percent.

Meanwhile, the major European markets have all turned lower after seeing strength earlier in the day. While the French CAC 40 Index has edged down by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 0.6 percent.

In the bond market, treasuries have come under pressure over the course of the morning. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.9 basis points at 1.941 percent.