Profit Taking Contributes To Early Pullback On Wall Street

Stocks are seeing modest weakness in morning trading on Thursday following the strong upward move seen in the previous session. The major averages have moved to the downside after ending Wednesday’s trading at new record closing highs.

Currently, the major averages remain in negative territory but off their worst levels of the day. The Dow is down 55.38 points or 0.2 percent at 26,060.27, the Nasdaq is down 3.61 points or 0.1 percent at 7,294.67 and the S&P 500 is down 3.27 points or 0.1 percent at 2,799.29.

The pullback on Wall Street may be partly due to profit taking, with traders cashing in on the recent strength in the markets.

Traders are also digesting the latest batch of economic news, including a report from the Commerce Department showing a steep drop in new residential construction in the month of December.

The report said housing starts tumbled by 8.2 percent to an annual rate of 1.192 million in December from the revised November estimate of 1.299 million.

Economists had expected housing starts to drop to a rate of 1.275 million from the 1.297 million originally reported for the previous month.

Building permits, an indicator of future housing demand, edged down by 0.1 percent to a rate of 1.302 million in December from a revised 1.303 million in November.

The Federal Reserve Bank of Philadelphia also released a report showing growth in activity in the Philadelphia-area manufacturing sector slowed by more than anticipated in the month of January.

The Philly Fed said its index for current manufacturing activity in the region slid to 22.2 in January from a revised 27.9 in December, although a positive reading still indicates growth.

Economists had expected the Philly Fed index to dip to 25.0 from the 26.2 originally reported for the previous month.

Meanwhile, a separate report from the Labor Department showed first-time claims for unemployment benefits pulled back to lowest level in nearly 45 years in the week ended January 13th.

The report said initial jobless…

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