Stocks moved sharply lower at the start of trading on Wednesday, adding to the losses posted in the previous session. The major averages all showed notable moves to the downside, pulling back further off their recent highs.
The major averages have edged up off their lows for the young session in the past few minutes but remain firmly negative. The Dow is down 103.91 points or 0.8 percent at 13,095.64, the Nasdaq is down 27.49 points or 0.9 percent at 3,086.08 and the S&P 500 is down 10.30 points or 0.7 percent at 1,403.08.
The initial weakness on Wall Street came as traders continued to express disappointment with the minutes of the latest Federal Reserve meeting, which were interpreted as a sign that the central bank is not likely to engage in any further quantitative easing.
A disappointing Spanish bond auction also generated some negative sentiment, overshadowing a report from payroll processor Automatic Data Processing (ADP) showing continued job growth in the U.S. private sector.
ADP said employment increased by 209,000 jobs in March following an upwardly revised increase of 230,000 jobs in February. Economists had expected an increase of about 208,000 jobs compared to the addition of 216,000 jobs originally reported for the previous month.
Shortly, the Institute for Supply Management is scheduled to release its monthly report on activity in the U.S. service sector. Economists expect the index of activity in the sector to edge down to 57.0 in March from 57.3 in February.
After seeing substantial weakness in the previous session, gold stocks are seeing further downside in early trading amid a sharp drop by the price of the precious metal. With the price of gold plummeting by nearly $50 an ounce, the NYSE Arca Gold Bugs Index is down by 2.3 percent.
Electronic storage stocks have also come under pressure, with SanDisk (SNDK) leading the way lower after the memory chip maker lowered its first quarter revenue guidance.
Semiconductor, housing, and networking stocks are also seeing considerable weakness, moving lower along with the most of the major sectors.
In overseas trading, stock markets across the Asia-Pacific region came under pressure on Wednesday. Japan's Nikkei 225 Index tumbled by 2.2 percent, while Australia's All Ordinaries Index edged down by 0.1 percent. The markets in Hong Kong and mainland China were closed for public holidays.
The major European markets have also shown significant moves to the downside on the day. While the German DAX Index has plunged by 2.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 1.8 percent and 1.7 percent, respectively.
In the bond market, treasuries are regaining ground after falling sharply in late-day trading on Tuesday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.5 basis points at 2.239 percent.
by RTT Staff Writer
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