U.S. Stocks Climb Off Worst Levels But Close Mostly Lower

(RTTNews) - Stocks saw some weakness during trading on Thursday, giving back ground following the advance seen over the course of the previous session. The major averages all moved to the downside, with the Nasdaq and the S&P 500 pulling back off yesterday's record closing highs.

The Nasdaq and the S&P 500 climbed well off their worst levels going into the close but remained in the red. The Nasdaq edged down 18.75 points or 0.1 percent to 23,024.63, the S&P 500 fell 18.61 points or 0.3 percent to 6,735.11 and the Dow slid 243.36 points or 0.5 percent to 46,358.42.

The pullback on Wall Street may partly have reflected profit taking following recent strength in the markets, which came amid persistent optimism about the artificial intelligence trade.

Investors may also have begun to express concerns about the ongoing U.S. government shutdown, which entered its ninth day today with no end in sight.

Lawmakers in Washington continue to struggle to pass a temporary funding bill due in part to Democrats' demands that the legislation include an extension of enhanced Obamacare tax credits.

Verbal confrontations between Republicans and Democrats on Capitol Hill on Wednesday suggest the stalemate is likely to drag on.

While traders have largely shrugged off the shutdown over the past week, worries about the economic impact of a prolonged suspension of non-essential government services may be starting to weigh on the markets.

Traders also kept an eye on remarks by several Federal Reserve officials, with Fed Governor Michael Barr said the central bank should move "cautiously" due to considerable uncertainty about the future course of the economy.

"If we see inflation moving further away from our target, then it may be necessary to keep policy at least modestly restrictive for longer," Barr said during remarks at an Economic Club of Minnesota Luncheon

"If we see heightened risks in the labor market, then we may need to move more quickly to ease policy," he added. "The FOMC can, and I believe would, act forcefully to stabilize the economy if necessary."

Fed Chair Jerome Powell also delivered welcoming remarks at a Community Bank Conference but did not provide any insight into the outlook for interest rates.

Sector News

Gold stocks pulled back sharply after surging in the previous session, with the NYSE Arca Gold Bugs Index plunging by 4.5 percent as the price of the precious metal gave back ground after soaring to record highs.

Significant weakness was also visible among housing stocks, as reflected by the 2.5 percent slump by the Philadelphia Housing Sector Index. The index tumbled to its lowest closing level in two months.

Energy stocks also saw considerable weakness amid a steep drop by the price of crude oil, moving notably lower along computer hardware and transportation stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index surged by 1.8 percent, while China's Shanghai Composite Index shot up by 1.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index crept up by 0.1 percent, the French CAC 40 Index dipped by 0.2 and the U.K.'s FTSE 100 Index fell by 0.4 percent.

In the bond market, treasuries moved to the downside after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.9 basis points to 4.148 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to the University of Michigan's preliminary readings on consumer sentiment and inflation expectations in the month of October.