Stocks moved to the downside at the start of trading on Wednesday, giving back some ground after ending the previous session sharply higher. The major averages all slid into negative territory but did not see much follow-through on the initial downward move.
The major averages have bounced off their lows for the young session in the past few minutes but remain in the red. The Dow is down 58.58 points or 0.5 percent at 13,056.96, the Nasdaq is down 2.18 points or 0.1 percent at 3,040.64 and the S&P 500 is down 3.88 points or 0.3 percent at 1,386.90.
The initial weakness on Wall Street was partly due to profit taking, with some traders cashing in on Tuesday's substantial gains amid lingering uncertainty about the financial situation in Europe.
A negative reaction to the latest batch of earnings news has also contributed to the pullback by the markets, with shares of Intel (INTC) under pressure after the semiconductor giant reported its first quarter results after the close of the previous session.
Intel reported first quarter earnings that exceeded analyst estimates on revenues that came in line with expectations. However, the company also provided disappointing gross margin guidance. Intel is down by 2.6 percent, contributing to a 1.3 percent drop by the Philadelphia Semiconductor Index.
Shares of IBM (IBM) are also seeing early weakness after the tech giant reported better than expected than first quarter earnings but on weaker than expected sales.
Housing stocks are also seeing significant weakness, resulting in a 1.3 percent drop by the Philadelphia Housing Sector Index. Radian Group (RDN) is leading the sector lower after Moody's downgraded the company's senior debt rating.
Networking, health insurance, and natural gas stocks are also seeing early weakness, while notable strength has emerged among oil service stocks.
Internet media giant Yahoo (YHOO) is trading higher after reporting first quarter earnings and revenues that exceeded analyst estimates.
In overseas trading, stock markets across the Asia-Pacific region moved to the upside on Wednesday, benefiting from the overnight rally on Wall Street. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index advanced by 1.1 percent.
Meanwhile, the major European markets have come under pressure on the day. While the U.K.'s FTSE 100 Index is down by 0.1 percent, the German DAX Index is down by 0.6 percent and the French CAC 40 Index is down by 1.2 percent.
In the bond market, treasuries are moving higher after ending the previous session firmly in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 1.984 percent.
by RTT Staff Writer
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