Oil prices surged above the $121 mark earlier in the day partly due to concerns about rising tensions between the U.S. and Russia. With the U.S. angering Russia with the announcement of its missile shield deal with Poland on Wednesday, there is some concern that Russia could retaliate by cutting off energy shipments to Western countries. The price increase this morning also comes amid a notable decrease in the value of the U.S. dollar, which is pulling back well off its recent highs. After seeing modest strength on Wednesday, the U.S. dollar index is currently down about 1 percent. Nonetheless, strength in the resource sector is keeping selling pressure to a minimum. Gold, oil and oil service stocks are seeing notable gains. Meanwhile, investors continue to worry over the health of the financial sector. A Citigroup analyst joined several others making negative comments about banks and brokerage firms in the past week, lowering his third quarter estimates for Goldman Sachs (GS) Morgan Stanley (MS) and Lehman Brothers (LEH). On the economic front, the Labor Department released its report on weekly jobless claims, which showed a bigger than expected decline in initial claims. Elsewhere, the Philadelphia Federal Reserve released its index on manufacturing activity, showing that activity contracted at a slower pace than expected. In recent trading, the major averages have been somewhat rangebound. The Dow is currently down 46.49 at 11,370.94, the Nasdaq is down 20.34 at 2,368.74 and the S&P 500 is down 3.53 at 1,271.01. Sector News Airline stocks are turning in some of the worst performances, hurt by the soaring oil prices. The Amex Airline Index is seeing a decline of 5.2 percent, adding to losses posted in the previous three sessions. Brokerage stocks are showing considerable weakness as well following the comments made by the Citigroup analyst. The Amex Securities Broker/Dealer Index is currently down 2.6 percent, extending a recent downtrend. Earlier in the day, the index set a three week intraday low. Within the brokerage sector, Lehman Brothers is seeing one of the biggest declines. While the analyst comments have dragged the sector lower as a whole, Lehman is seeing added selling pressure following a report from the Financial Times late Wednesday that said the investment bank tried to sell up to half of its shares to investor in South Korea or China earlier in the month but did not succeed. Lehman is currently posting a 6.9 percent loss. Biotech stocks are also sharply lower, with the Amex Biotechnology Index falling 1.5 percent. The index has been trending lower for the past four sessions, and today's decline sent it to a two-week intraday low. Amylin Pharmaceuticals (AMLN) is seeing considerable weakness on continued concerns over the safety of its key diabetes drug. Earlier in the week, the FDA said that Byetta, a diabetes medication, could be linked to six cases of severe pancreatitis. All of the cases required hospitalization, and two of them were fatal. Other stocks that are seeing notable weakness include banking, real estate and defense stocks. The S&P Bank Index is down 1.5 percent, the Morgan Stanley REIT Index is down 1.7 percent and the Philadelphia Defense Index is down 1.2 percent. On the other hand, most resource stocks are showing considerable strength, benefitting from the increase in commodity prices. Gold stocks are seeing notable gains, as the price of gold rises by nearly $24 an ounce. The Amex Gold Bugs Index is up 6.2 percent. Oil and oil service stocks are also showing strength. The Amex Oil Index is up 1.8 percent, while the Philadelphia Oil Service Index is up 2.5 percent. Health insurance stocks are higher as well, with the Morgan Stanley Healthcare Payor Index climbing 1.9 percent. With the gain, the index is reversing most of the losses posted in the previous two sessions. Stocks In The News Among individual stocks, JDS Uniphase (JDSU) is seeing significant selling pressure after the company reported its fourth quarter results after the markets closed on Wednesday. The company said its quarterly loss widened from last year, mainly due to non-recurring charges, missing analysts' expectations. Shares of maker of the communications components maker are tumbling 15.4 percent, reversing the gains posted in the previous two sessions. Earlier in the day, the stock set a seven-month intraday low. Salesforece.com is also posting a substantial loss after the company's stock received a number of downgrades from several financial analysts in light of a weak third quarter forecast. Along with its second quarter earnings, the company said it expect revenue to come in between $273 million ant $274 million in its third quarter, well below analysts' expectations of $275 million. The stock is down 15.9 percent after setting a five-month intraday low. On the other hand, Limited Brands (LTD) is showing considerable strength after the company reported second quarter earnings per share that topped analysts' expectations. At the same time, the company raised its earnings forecast for the full year 2008. Shares of the specialty retailer are currently up 10.7 percent, ending its recent downtrend. Other Markets Stock markets across the Asia-Pacific region closed lower Thursday on recession fears. The Japanese market opened in positive territory, but it soon moved into negative terrain on lingering concerns about the U.S. financial sector and global economic growth. The benchmark Nikkei 225 index settled near a five-month low at 12,752, down 0.8 percent. The major European markets ended the day lower as well on Thursday. While the French CAC 40 Index and the German DAX Index closed down 1.4 percent and 1.3 percent, respectively, the U.K.'s FTSE 100 Index is ended the day less than a tenth of a percent lower. Meanwhile, treasuries continue to show weakness in afternoon trading. Subsequently, the yield on the benchmark ten-year note is currently up 3.6 basis points at 3.835 percent.  Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved