Stocks Move Moderately Lower Following Recent Strength - U.S. Commentary

(RTTNews) - Stocks have moved moderately lower over the course of early trading on Wednesday, giving back some ground after trending higher in recent sessions. The major averages have all slid into negative territory, although selling pressure has remained relatively subdued.

Currently, the major averages are posting modest losses, just off their lows for the young session. The Dow is down 59.28 points or 0.3 percent at 17,988.30, the Nasdaq is down 11.83 points or 0.2 percent at 4,887.44 and the S&P 500 is down 7.33 points or 0.4 percent at 2,093.01.

Profit taking is contributing to some of the early weakness on Wall Street following the recent strength shown by the markets.

The modest gains seen in the previous session lifted the S&P 500 to a new record closing high, while the Nasdaq reached its best levels since early 2000.

The pullback also comes following the release of a batch of disappointing U.S. economic data, including a report from the Commerce Department showing a bigger than expected drop in housing starts.

The report said housing starts tumbled 2.0 percent to an annual rate of 1.065 million in January after jumping 7.1 percent to the revised December estimate of 1.087 million.

Economists had expected housing starts to fall by 1.7 percent to a rate of 1.070 million in January from the 1.089 million originally reported for the previous month.

A separate report from the Labor Department showed that producer prices fell by much more than expected in January amid another substantial decrease in energy prices.

The Labor Department said its producer prices index for final demand slumped by 0.8 percent in January after edging down by 0.2 percent in each of the two previous months. The index had been expected to drop by 0.4 percent.

Excluding food and energy prices, the core producer price index dipped by 0.1 percent in January after rising by 0.3 percent in December. Core prices had been expected to inch up by 0.1 percent.

Additionally, the Federal Reserve released a report showing that industrial production rose by slightly less than expected in January.

Nonetheless, traders seem somewhat reluctant to make any significant moves as they continue to keep a close eye on the Greek debt negotiations.

Reports indicating the new Greek government plans to apply for an extension to its current loan agreement contributed to the rebound seen in the previous session.

Telecom stocks have shown a notable move to the downside in early trading, dragging the NYSE Arca North American Telecom Index down by 1.3 percent. The index is pulling back further off the fourteen-year closing high it set last Friday.

Banking, pharmaceutical, and trucking stocks are also seeing some early weakness, while most of the major sectors are showing only modest moves.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index surged up by 1.2 percent, while Hong Kong's Hang Seng Index rose by 0.2 percent in an abbreviated session.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index has edged down by 0.2 percent, the German DAX Index is up by 0.4 percent and the French CAC 40 Index is up by 0.8 percent.

In the bond market, treasuries are regaining some ground after trending lower over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 2.12 percent.