Stocks Showing A Lack Of Direction In Morning Trading - U.S. Commentary

(RTTNews) - Stocks have shown a lack of direction in recent trading on Thursday after failing to sustain an initial upward move. The major averages have pulled back well off their early highs and are now lingering near the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Dow is down 6.54 points or less than a tenth of a percent at 15,937.92, the Nasdaq is up 16.38 points or 0.4 percent at 4,484.54 and the S&P 500 is up 2.06 points or 0.1 percent at 1,885.01

The initial strength on Wall Street was partly due to a sharp increase by the price of crude oil, which jumped close to $35 a barrel.

The price of crude oil benefited from Russian Energy Minister Alexander Novak's claims that Saudi Arabia proposed cutting oil production by up to 5 percent.

Crude for March delivery has subsequently given back ground after OPEC delegates dismissed Novak's suggestion that the oil minister of OPEC and non-OPEC countries plan to meet next month.

The pullback by stocks may also reflect concerns about the outlook for the U.S. economy following the release of disappointing manufacturing data before the start of trading.

A report from the Commerce Department said durable goods orders plunged by 5.1 percent in December after falling by a revised 0.5 percent in November. Economists had expected orders to dip by just 0.6 percent.

Excluding a 12.4 percent decrease in orders for transportation equipment, durable goods orders still tumbled by 1.2 percent in December compared to a 0.5 percent drop in November.

Jay Morelock, an economist at FTN Financial, said, "Since orders lead shipments, the next few months do not look like they will be getting much better."

"Most have shied from talking about a U.S. recession despite market volatility, but this is among the worst of a stretch of bad numbers in the last four weeks," he added.

A separate report from the National Association of Realtors also showed a much smaller than expected increase in pending home sales in the month of December.

Many of the major sectors are showing only modest moves, although substantial weakness has emerged among telecom stocks. Reflecting the weakness in the sector, the NYSE Arca Telecom Index has tumbled by 3 percent.

Qualcomm (QCOM) has helped to lead the sector lower after the chipmaker reported first quarter results that beat estimates but provided disappointing guidance.

Biotechnology stocks have also shown a substantial move to the downside, dragging the NYSE Arca Biotechnology Index down by 2.8 percent. Earlier in the session, the index hit its lowest intraday level in well over a year.

Gold, airline, and healthcare stocks are also seeing notable weakness, while strength is visible among energy, internet, and utilities stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index dropped by 0.7 percent, while Hong Kong's Hang Seng Index climbed by 0.8 percent.

Meanwhile, the major European markets have all shown notable moves to the downside on the day. While the German DAX Index has plunged by 2.5 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 1.6 percent and 1.5 percent, respectively.

In the bond market, treasuries are showing a lack of direction amid the choppy trading on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.996 percent.