Profit Taking Contributes To Initial Weakness On Wall Street

Stocks have moved moderately lower in morning trading on Thursday, giving back some ground after climbing to record highs in the previous session. The major averages have all moved to the downside, although selling pressure has remained somewhat subdued.

The major averages have climbed off their worst levels of the day but currently remain in negative territory. The Dow is down 143.68 points or 0.5 percent at 29,407.74, the Nasdaq is down 21.52 points or 0.2 percent at 9,704.45 and the S&P 500 is down 7.65 points or 0.2 percent at 3,371.80.

Profit taking contributed to initial weakness on Wall Street, as some traders looked to cash in on recent gains amid news of a jump in new coronavirus cases.

Officials revealed an additional 242 deaths from the coronavirus in the Chinese province of Hubei as well as 14,840 new confirmed cases.

While the jump in confirmed cases was partly due to the adoption of new methodology for counting infections, the spike has still led to renewed fears about the outbreak.

However, traders have recently been able to shrug off concerns about the coronavirus amid optimism that the outbreak will eventually be contained.

The early weakness on Wall Street may subsequently be seen as another buying opportunity even as a number of companies continue to warn about the impact of the outbreak.

On the U.S. economic front, the Labor Department released a report showing a modest increase in consumer prices in the month of January.

The Labor Department said its consumer price index inched up by 0.1 percent in January after rising by 0.2 percent in December. Economists had expected prices to increase by 0.2 percent.

Core consumer prices, which exclude food and energy prices, rose by 0.2 percent in January after ticking up by 0.1 percent in the previous month. The increase in core prices matched economist estimates.

A separate report from the Labor Department showed first-time claims for U.S. unemployment benefits inched up by less than expected in the week ended February 8th.

The report said initial jobless claims crept up to 205,000, an increase of 2,000 from the previous week’s revised level of 203,000.

Economists had expected jobless claims to rise to 210,000 from the 202,000 originally reported for the previous week.

Computer hardware stocks have shown a substantial move back to the downside, dragging the NYSE Arca Computer Hardware Index down by 2.5 percent.

NetApp (NTAP) is leading the sector lower after the data storage company reported fiscal third quarter results that missed analyst estimates and announced the retirement of its CFO.

Pharmaceutical, energy and steel stocks are also seeing some weakness on the day, although selling pressure remains somewhat subdued.

Meanwhile, gold stocks have moved sharply higher amid an increase by the price of the precious metal, with the NYSE Arca Gold Bugs Index jumping by 2.1 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index edged down by 0.1 percent, while China’s Shanghai Composite Index slid by 0.7 percent.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has plunged by 1.5 percent, the French CAC 40 Index is down by 0.6 percent and the German DAX Index is down by 0.4 percent.

In the bond market, treasuries have rebounded following the pullback seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2 basis points at 1.610 percent.

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