Profit Taking Leads To Modest Weakness On Wall Street - U.S. Commentary

(RTTNews) - Following the upward move seen over the two previous sessions, stocks saw modest weakness during trading on Wednesday. Selling pressure remained relatively subdued, however, limiting the downside for the markets.

The major averages ended the day in negative territory. The Dow dipped 32.66 points or 0.2 percent to 19,941.96, the Nasdaq edged down 12.51 points or 0.2 percent to 5,471.43, and the S&P 500 slipped 5.58 points or 0.3 percent to 2,265.18.

The modest weakness on Wall Street was partly due to profit taking after the gains seen on Tuesday lifted the Dow and the Nasdaq to new record closing highs.

Nonetheless, traders seemed somewhat reluctant to make more significant moves amid concerns about missing out on any further upside.

Some traders may also have already been away from their desks, looking to get a head start on the looming holiday weekend.

On the U.S. economic front, the National Association of Realtors released a report unexpectedly showing a continued increase in existing home sales in the month of November.

NAR said existing home sales climbed 0.7 percent to an annual rate of 5.61 million in November after surging up by 1.5 percent to a revised 5.57 million in October.

The continued increase came as a surprise to economists, who had expected existing home sales to dip to a rate of 5.54 million from the 5.60 million originally reported for the previous month.

With the unexpected increase, existing home sales rose to the highest annual rate since reaching 5.79 million in February of 2007.

Among individual stocks, shares of Finish Line (FINL) fell sharply after the athletic apparel retailer reported a wider than expected third quarter loss and provided disappointing guidance.

Delivery giant FedEx (FDX) also moved to the downside after reporting second quarter earnings that rose-year-over-year but came in below expectations.

On the other hand, shares of Invensense (INVN) spiked higher after the chipmaker agreed to be acquired Japanese electronics company TDK for $1.33 billion.

Sector News

Biotechnology stocks showed a significant move to the downside on the day, dragging the NYSE Arca Biotechnology Index down by 1.9 percent.

Merrimack Pharmaceuticals (MACK) is posting a steep loss after the company halted a mid-stage trial of its breast cancer treatment.

Considerable weakness was also visible among commercial real estate stocks, as reflected by the 1.5 percent drop by the Morgan Stanley REIT Index.

Meanwhile, natural gas stocks moved notably higher on the day amid a significant increase by the price of natural gas.

Most of the other major sectors showed only modest moves, contributing to the relatively lackluster performance by the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. Japan's Nikkei 225 Index fell by 0.3 percent, while Hong Kong's Hang Seng Index climbed by 0.4 percent.

Meanwhile, the major European markets turned in a lackluster performance on the day. While the French CAC 40 Index dipped by 0.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index ended the day near the unchanged line.

In the bond market, treasuries regained ground following the pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 2.546 percent. Looking Ahead

Following several relatively quiet days on the U.S. economic front, a slew of data is scheduled to be released on Thursday. Traders are likely to keep a close eye on reports on weekly jobless claims, durable goods orders, and personal income and spending.

Additionally, Bed Bath & Beyond (BBBY), Micron (MU), and Red Hat (RHT) are releasing their quarterly results after the close of today's trading, and ConAgra (CAG) and Rite Aid (RAD) are due to report their results before the start of trading on Thursday.