Stocks Close Mostly Lower Following Another Choppy Session - U.S. Commentary

(RTTNews) - While selling pressure was somewhat subdued, stocks moved mostly lower over the course of the trading day on Wednesday. A negative reaction to some earnings news contributed to the weakness on Wall Street along with lingering concerns about the outlook for the Federal Reserve's stimulus program.

After ending the previous session at a record closing high, the Dow edged down 25.50 points or 0.2 percent to 15,542.24. The S&P 500 also fell 6.45 points or 0.4 percent to 1,685.94, while the Nasdaq inched up 0.33 points or less than a tenth of a percent to 3,579.60.

A notable drop by shares of Caterpillar (CAT) weighed on the Dow, with the construction equipment maker falling by 2.4 percent on the day.

The loss posted by Caterpillar came after the company reported disappointing second quarter results and lowered its full-year guidance.

AT&T (T) also came under pressure after the telecom giant reported slightly weaker than expected second quarter earnings. Shares of AT&T fell by 1.1 percent.

The weakness on Wall Street also came on the heels of the release of a report from the Commerce Department showing a substantial increase in new home sales.

The report said new home sales surged up by 8.3 percent to an annual rate of 497,000 in June from the revised May rate of 459,000. With the increase, new home sales reached a five-year high.

The report was seen as a positive sign for the house market but also added to concerns about the outlook for the Fed's asset purchase program.

A Bloomberg News survey released on Tuesday showed that a growing number of economists expect the Fed to trim its monthly bond buying to $65 billion in September from the current pace of $85 billion.

Meanwhile, shares of Apple (AAPL) showed a strong move to the upside on the day, contributing to the slightly higher close by the tech-heavy Nasdaq.

Apple jumped by 5.1 percent after reporting fiscal third quarter earnings that fell year-over-year but came in above analyst estimates. The iPad and iPhone maker also reported better than expected revenues.

Sector News

Gold stocks showed a substantial move to the downside over the course of the trading day, dragging the NYSE Arca Gold Bugs Index down by 4.9 percent. The loss by the index came after it ended the previous session at its best closing level in over a month.

A notable decrease by the price of gold contributed to the pullback by the sector, with gold for August delivery sliding $15 to $1,319.70 an ounce.

Significant weakness also emerged among housing stocks, which came under pressure despite the upbeat new home sales report. The Philadelphia Housing Sector Index tumbled by 2.6 percent amid steep losses by Toll Brothers (TOL) and MDC Holdings (MDC).

Commercial real estate stocks also saw significant weakness on the day, resulting in a 2.1 percent drop by the Morgan Stanley REIT Index.

Semiconductor, railroad, and steel stocks also came under pressure, moving to the downside along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

Meanwhile, the major European markets all moved to the upside over the course of the session. While the U.K.'s FTSE 100 Index rose by 0.4 percent, the German DAX Index advanced by 0.8 percent and the French CAC 40 Index jumped by 1 percent.

In the bond market, treasuries moved sharply lower on the day, pulling back further off their recent highs. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.2 basis points to 2.588 percent.

Looking Ahead

Earnings news is likely to remain in focus during trading on Thursday, with Facebook (FB), Visa (V), Qualcomm (QCOM) and E*Trade (ETFC) among the companies releasing their quarterly results after the close of today's trading.

Trading on Thursday could also be impacted by the release of reports on weekly jobless claims and durable goods orders.