U.S. Stocks Giving Back Ground Following Yesterday's Rally

Stocks have moved mostly lower during trading on Wednesday, giving back ground after ending the previous session notably higher. The major averages have all moved to the downside, with the tech-heavy Nasdaq leading the way lower.

Currently, the Nasdaq is down 122.27 points or 1.0 percent at 11,991.52, and the S&P 500 is down 26.92 points or 0.7 percent at 4,137.08. The narrower Dow is posting a relatively modest loss, edging down 80.06 points or 0.2 percent at 34,076.63.

The pullback on Wall Street comes as traders look to cash in on some of yesterday’s gains, which came amid a positive reaction to comments by Federal Reserve Chair Jerome Powell.

Powell acknowledged recent indications of easing inflation but noted that the disinflationary process has a long way to go and cautioned further interest rate hikes could be needed.

Overall trading activity remains somewhat subdued, however, with a relatively light economic calendar keeping some traders on the sidelines.

Reports on initial jobless claims and consumer sentiment are likely to attract attention in the coming days, with the consumer sentiment report including readings on inflation expectations.

Telecom stocks have shown a significant move to the downside on the day, dragging the NYSE Arca North American Telecom Index down by 1.3 percent.

Notable weakness is also visible among natural gas stocks, as reflected by the 1.2 percent drop by the NYSE Arca Natural Gas Index. The weakness in the sector comes amid a steep decline by the price of natural gas.

Housing, utilities and retail stocks are also seeing some weakness on the day, while brokerage stocks have move to the upside.

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 South Korea’s Kospi jumped by 1.3 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index is up by 0.1 percent, the U.K.’s FTSE 100 Index is up by 0.4 percent and the German DAX Index is up by 0.7 percent.

In the bond market, treasuries have moved modestly lower, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.5 basis points at 3.689 percent.

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