Stocks have shown a notable move to the downside in early trading on Wednesday after ending the previous session roughly flat. The major averages have slid firmly into negative territory but remain well off last Friday's lows.
The major averages have seen some further downside in the past few minutes, hitting new lows for the young session. The Dow is down 94.79 points or 0.8 percent at 12,408.02, the Nasdaq is down 27.81 points or 1 percent at 2,811.27 and the S&P 500 is down 10.10 points or 0.8 percent at 1,306.53.
The early weakness on Wall Street reflects continued concerns about the financial situation in Europe amid a meeting of European leaders in Brussels.
The European Union summit is expected to focus on ways to boost the struggling European economy as well as the ongoing uncertainty about Greece following the debt-plagued nation's failure to form a government.
Noting yesterday's reaction to remarks by former Greek Prime Minister Lucas Papademos, Peter Boockvar, managing director at Miller Tabak, said, "The markets are on edge and sensitive to every possible out of control scenario coming out of Europe."
Disappointing earnings news from PC giant Dell (DELL) is also contributing to the pullback by the markets. Dell is down by 15 percent after reporting weaker than expected first quarter results and providing disappointing second quarter revenue guidance.
The steep loss by Dell is contributing to considerable weakness in the computer hardware sector, with the NYSE Arca Computer Hardware Index down by 3.7 percent. Hewlett-Packard (HPQ) and Logitech (LOGI) are under pressure along with Dell.
Significant weakness has also emerged among software stocks, as reflected by the 2 percent loss being posted by the Dow Jones Software Index. Steel, oil service, and natural gas stocks are also seeing notable weakness, moving lower along with most of the major sectors.
In overseas trading, stock markets across the Asia-Pacific region came under pressure during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 2 percent, while Hong Kong's Hang Seng Index ended the day down by 1.3 percent.
The major European markets are also seeing significant weakness on the day. The German DAX Index is down by 1.5 percent, the U.K.'s FTSE 100 Index is down by 1.7 percent, and the French CAC 40 Index is down by 2 percent.
In the bond market, treasuries are moving back to the upside after giving back some ground in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.8 basis points at 1.735 percent.
by RTT Staff Writer
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