U.S. Stocks Move To The Downside, Nasdaq Hits Two-Month Low

After showing a lack of direction early in the session, stocks have moved mostly lower over the course of the trading day on Wednesday. The major averages have all moved to the downside, with the tech-heavy Nasdaq falling to its lowest intraday level in over two months.

The major averages have climbed well off their worst levels in recent trading but remain in negative territory. The Dow is down 163.31 points or 0.5 percent at 33,078.25, the Nasdaq is down 69.44 points or 0.7 percent at 10,283.79 and the S&P 500 is down 21.20 points or 0.6 percent at 3,808.05.

The weakness that has emerged on Wall Street may partly reflect ongoing concerns about the economic outlook and the possibility of higher interest rates leading to a recession.

Overall trading activity remains relatively subdued, however, as many traders remain away from their desks amid the holidays.

Following the long Christmas weekend, the markets are set for another break this weekend due to New Year’s Day.

Traders may also be looking ahead to next week’s closely watched monthly jobs report, which could shed additional light on the outlook for interest rates and the economy.

Reports on manufacturing and service sector activity are also likely to attract attention next week along with the minutes of the latest Federal Reserve meeting.

On the economic front, a report released by the National Association of Realtors unexpectedly showed a continued slump in U.S. pending home sales in the month of November.

NAR said its pending home sales index tumbled by 4.0 percent to 73.9 in November after plunging by 4.7 percent to a revised 77.0 in October.

The extended nosedive came as a surprise to economists, who had expected pending home sales to increase by 0.6 percent.

Sector News

Tobacco stocks have moved sharply lower over the course of the session, resulting in a 2.8 percent nosedive by the NYSE Arca Tobacco Index.

Significant weakness also remains visible among energy stocks, with a notable decrease by the price of crude oil weighing on the sector.

With crude for February delivery slumping $0.94 to $78.59 a barrel, the Philadelphia Oil Service Index is down by 2.6 percent and the NYSE Arca Oil Index is down by 1.8 percent.

A decrease by the price of gold is also weighing on gold stocks, dragging the NYSE Arca Gold Bugs Index down by 2.5 percent.

Natural gas, steel and computer hardware stocks have also shown notable moves to the downside over the course of the session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index dipped by 0.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index rose by 0.3 percent, the German DAX Index and the French CAC 40 Index slid by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries have shown a lack of direction over the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.868 percent.

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