Dow falls 100 again in choppy trade; S&P 500 tries to hold green for 2015

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U.S. stocks traded lower Thursday, the last day of trade for 2015, as investors eyed oil prices.

The Dow Jones industrial average traded about 100 points lower after briefly falling 150 points in morning trade as all constituents declined.

The S&P 500 struggled to hold positive territory for 2015 in intraday trade. Energy recovered and attempted to hold higher as oil tried to stabilize near multi-year lows.

“I think the big moves have already been made and investors are now positioning for next year,” said Adam Sarhan, CEO of Sarhan Capital, noting focus for traders Thursday is likely around the week-to-date, quarter-to-date and year-to-date levels.

With Thursday morning’s decline, the major U.S. averages are on track to end the week little changed, but up at least 7 percent each for the quarter.

The key concern for the day will be whether the S&P 500 manages close higher for 2015, after three-straight years of double-digit gains.

As of Wednesday’s close, the S&P 500 was up 0.22 percent year-to-date and the Nasdaq composite was up 6.96 percent for the year so far. The Dow Jones industrial average was down 1.23 percent for 2015.

Trade volume so far this week has been among the lowest of the year, and will likely remain thin Thursday ahead of Wall Street’s closure on Friday for the New Year’s Day holiday.

“Probably more urgency to sell than to buy. That’s why we’re down,” said James Meyer, chief investment officer at Tower Bridge Advisors.

“It’s a day of portfolio adjustments. I think you’re going to find some people taking some money off the table and switching to more conservative (assets). So bonds are up and stocks are down,” he said.

Despite a volatile year that saw the major U.S. averages plunge more than 10 percent, the indexes are within 5 percent of their record intraday highs and on pace to end the year little changed to slightly higher.

With the Federal Reserve’s first rate hike out of the way and little economic news in the last two holiday-shortened trading weeks, stock market action has been tightly correlated to moves in oil and other commodities.

Oil held higher in intraday trade but remained near seven-year lows. The U.S. oil drilling rig count showed a decline of 2, according to Baker Hughes.

Brent and U.S. West Texas Intermediate (WTI) crude pared intraday attempts at gains to hold 1 percent higher or more, near $37 a barrel.

Brent turned positive in intraday trade as a fierce storm in the North Sea forced oil firms to evacuate platforms and shut down production Thursday.

Also on Thursday, Iran President Hassan Rouhani ordered his defense minister to expand Iran’s missile program, in response to a U.S. threat to impose sanctions over a ballistic missile test Iran carried out in October.

“I think this is going to be a short-lived bounce in energy prices,” said Robert Pavlik, chief market strategist at Boston Private Wealth.

U.S. crude oil fell more than 3 percent Wednesday to settle below $37 a barrel, contributing to the Dow Jones industrial average’s decline of about 117 points Wednesday.

Natural gas traded about 5 percent higher. Inventories showed a decline of 58 billion cubic feet in the week ended Dec. 25, according to StreetAccount.

In a light day of economic news, the Chicago Purchasing Managers’ Index (PMI) came in at 42.9 for December.

Weekly jobless claims came in at 287,000, up from 267,000 the week before.

Treasury yields held lower, with the 2-year yield around 1.06 percent and the 10-year yield near 2.27 percent as of 1:06 p.m., ET.

The U.S. dollar traded higher against major world currencies, with the euro falling below $1.09.

In early afternoon trade, the Dow Jones industrial average declined 60 points, or 0.34 percent, to 17,543, with Apple leading decliners and General Electric leading advancers.

The S&P 500 declined 6 points, or 0.29 percent, at 2,057, with utilities leading nine sectors lower and energy the only advancer.

The Nasdaq composite declined 22 points, or 0.42 percent, to 5,044.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 18.

Decliners were a step ahead of advancers on the New York Stock Exchange, with an exchange volume of 243 million and a composite volume of about nearly 1.7 billion.

High-frequency trading accounted for 49 percent of December’s daily trading volume of about 7.24 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.

Crude oil futures for February delivery gained 93 cents to $37.52 a barrel on the New York Mercantile Exchange.

Gold futures for February delivery gained $1.50 to $1,061.30 an ounce as of 1:06 p.m., ET.

On tap this week:

Thursday

10:30 a.m.: Natural gas inventories

4:30 p.m.: Fed balance sheet

Friday

New Year’s Day holiday

Markets closed

*Planner subject to change.

Evelyn Cheng

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