Nasdaq Remains Sharply Lower After Early Pullback, Dow Still Roughly Flat
Stocks came under pressure in early trading on Wednesday and remain mostly lower in afternoon trading. The tech-heavy Nasdaq has helped lead the pullback after moving sharply higher in the previous session.
After ending Tuesday’s trading at a nearly two-month closing high, the Nasdaq is down 115.82 points or 1.0 percent at 11,242.59. The S&P 500 is also down 21.02 points or 0.5 percent at 3,970.71.
Meanwhile, the narrower Dow has spent the day lingering near the unchanged line and is currently up 23.08 points or 0.1 percent at 33,616.00. The uptick by the blue chip index comes amid strong gains by McDonald’s (MCD) and UnitedHealth (UNH).
The pullback by the broader markets comes amid a steep drop by shares of Target (TGT), with the retail giant plunging by 12.3 percent.
Target is under pressure after reporting weaker than expected third quarter earnings and slashing its operating margin forecast for the current quarter.
Traders are also digesting a mixed batch of U.S. economic data, which has added to recent uncertainty about the outlook for interest rates.
Before the start of trading, the Commerce Department released a report showing a significant increase in U.S. retail sales in the month of October.
The report showed retail sales surged by 1.3 percent in October after coming in unchanged in September. Economists had expected retail sales to jump by 1.0 percent.
Excluding a sharp increase in sales by motor vehicle and parts dealers, retail sales still shot up by 1.3 percent in October after inching up by 0.1 percent in September. Ex-auto sales were expected to rise by 0.4 percent.
Meanwhile, the Federal Reserve released a separate report unexpectedly showing a modest decrease in U.S. industrial production in the month of October.
The Fed said industrial production edged down by 0.1 percent in October following a revised 0.1 percent uptick in September.
The dip surprised economists, who had expected industrial production to inch up by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.
The National Association of Home Builders also released a report showing a continued decrease in U.S. homebuilder confidence in the month of November.
The report showed the NAHB/Wells Fargo Housing Market Index declined for the 11th consecutive month, slumping to 33 in November after tumbling to 38 in October. Economists had expected the index to dip to 36.
With the bigger than expected decrease, the index fell to its lowest reading since June 2012, with the exception of the onset of the pandemic in the spring of 2020.
Semiconductor stocks continued to see substantial weakness on the day, with the Philadelphia Semiconductor Index plunging by 3.7 percent after ending the previous session at its best closing level in well over two months.
Considerable weakness also remains visible among computer hardware stocks, as reflected by the 3.1 percent nosedive by the NYSE Arca Computer Hardware Index.
Energy stocks have also come under pressure over the course of the session, moving sharply lower along with the price of crude oil.
With crude for December delivery tumbling $1.76 to $85.16 a barrel, the Philadelphia Oil Service Index is down by 2.6 percent and the NYSE Arca Oil Index is down by 2.4 percent.
Airline, steel and brokerage stocks have also shown notable moves to the downside on the day, while utilities stocks are bucking the downtrend.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index both fell by 0.5 percent, while Japan’s Nikkei 225 Index bucked the downtrend and crept up by 0.1 percent.
The major European markets also moved to the downside on the day. While the German DAX Index slumped by 1.0 percent, the French CAC 40 Index slid by 0.5 percent and the U.K.’s FTSE 100 Index dipped by 0.3 percent.
In the bond market, treasuries are extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 8.1 basis points at 3.718 percent.
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