U.S. Stocks Seeing Modest Weakness In Morning Trading

Stocks have moved modestly lower in morning trading on Wednesday, giving back ground after ending the previous session mostly higher. The major averages have all moved to the downside, although selling pressure has remained somewhat subdued.

Currently, the major averages are just off their lows of the young session. The Dow is down 152.52 points or 0.4 percent at 35,989.70, the Nasdaq is down 40.12 points or 0.3 percent at 15,933.73 and the S&P 500 is down 10.36 points or 0.2 percent at 4,690.54.

The modest weakness on Wall Street comes as traders express some uncertainty about the near-term outlook for the markets following recent volatility.

While worries about inflation contributed to a pullback by stocks last week, the Nasdaq and S&P 500 ended Tuesday’s trading just shy of their record closing highs following upbeat retail sales and industrial production data.

With the economy seemingly holding up well in the face of elevated inflation, traders remain concerned the Federal Reserve could accelerate its plans to tighten monetary policy.

Meanwhile, traders have shown a mixed reaction to earnings news from retail giants Target (TGT) and Lowe’s (LOW).

Shares of Target are seeing notable weakness even though the retailer reported third quarter results that beat expectations on both the top and bottom lines.

On the other hand, shares of Lowe’s (LOW) have moved higher after the home improvement retailer reported better than expected third quarter results and raised its full-year revenue guidance.

In U.S. economic news, the Commerce Department released a report showing an unexpected decrease in new residential construction in the month of October, although the report also showed a bigger than expected spike in building permits.

The report showed housing starts slid by 0.7 percent to an annual rate of 1.520 million in October after tumbling by 2.7 percent to a revised rate of 1.530 million in September.

The continued decline came as a surprise to economists, who had expected housing starts to jump by 1.6 percent to an annual rate of 1.580 million from the 1.555 million originally reported for the previous month.

Meanwhile, the Commerce Department said building permits surged up by 4.0 percent to an annual rate of 1.650 million in October after plummeting by 7.8 percent to a revised rate of 1.586 million in September.

Building permits, an indicator of future housing demand, had been expected to shoot up by 3.2 percent to an annual rate of 1.640 million from the 1.589 million originally reported for the previous month.

Financial stocks are seeing considerable weakness in morning trading, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index falling by 1.3 percent and 1.2 percent, respectively.

Notable weakness is also visible among commercial real estate stocks, as reflected by the 1.3 percent drop by the Dow Jones U.S. Real Estate Index.

On the other hand, gold stocks have shown a strong move to the upside, driving the NYSE Arca Gold Bugs Index up by 1.5 percent.

The strength among gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery climbing $14.20 to $1,868.30 an ounce.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.4 percent, while Hong Kong’s Hang Seng Index fell by 0.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.3 percent, the French CAC 40 Index and the German DAX Index are both up by 0.1 percent.

In the bond market, treasuries have moved slightly higher over the course of the morning. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 1.623 percent.