Stocks Regain Ground But Remain Mostly Negative - U.S. Commentary

(RTTNews) - While selling pressure has waned from earlier in the session, stocks remain mostly negative in mid-day trading on Wednesday. The losses on the day are partly offsetting the strength that was seen in the previous session.

The major averages have climbed well off their worst levels of the day but remain stuck in the red. The Dow is down 13.48 points or 0.1 percent at 17,674.34, the Nasdaq is down 26.29 points or 0.6 percent at 4,676.16 and the S&P 500 is down 5.28 points or 0.3 percent at 2,046.52.

The weakness on Wall Street is partly due to profit taking following recent strength in the markets, which lifted the Dow and the S&P 500 to new record closing highs on Tuesday. The Nasdaq also reached its best closing level since 2000.

Uncertainty ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting may also be weighing on the markets, with the minutes expected to shed some light on the outlook for interest rates.

Peter Boockvar, managing director at the Lindsey Group, said the Fed will hopefully provide more color behind the reasons why they no longer referred to labor resources as having "significant underutilization" and why they were more comfortable with the decline in inflation.

"We'll see if these changes were a hint to the market, that has certainly gone unheeded, that they would not be waiting until the latter half of 2015 that many expect to first raise rates assuming the economic data rolls in at the same pace as they've been over the past year," Boockvar said.

He added, "Also, keep an eye out for whether there is further discussion on the potential for market turbulence when rates begin to normalize."

Traders are also digesting a mixed housing report for the month October, as the Commerce Department reported a drop in housing starts but a jump in building permits.

Despite the pullback by the broader markets, shares of Lowe's (LOW) have moved sharply higher on the day after the home improvement retailer reported better than expected third quarter results and raised its full-year guidance.

Discount retailer Target (TGT) is also posting a substantial gain after reporting third quarter results that exceeded analyst estimates.

Sector News

After moving notably higher over the past few sessions, gold stocks have shown a sharp pullback on the day. Reflecting the weakness in the sector, the NYSE Arca Gold Bugs Index is plunging by 3.3 percent.

The weakness among gold stocks comes amid a notable decrease by the price of the precious metal, with gold for December delivery falling $18.10 to $1,179 an ounce.

Significant weakness also remains visible among steel stocks, as reflected by the 2.1 percent loss being posted by the NYSE Arca Steel Index. Cliffs Natural Resources (CLF) is leading the sector lower after announcing that it is pursuing exit options for its Eastern Canadian iron ore operations.

Computer hardware stocks are also seeing considerable weakness in mid-day trading, with the NYSE Arca Computer Hardware index falling by 1.4 percent. Lexmark (LXK) is turning in one of the sector's worst performances.

Telecom, software, and internet stocks have also moved lower on the day, while notable strength has emerged among natural gas stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index fell by 0.7 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the French CAC 40 Index and the German DAX Index crept up by 0.1 percent and 0.2 percent, respectively.

In the bond market, treasuries have moved to the downside, offsetting the modest strength seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.9 basis points at 2.351 percent.