After moving sharply higher over the course of the previous session, stocks are turning in a lackluster performance during trading on Wednesday. The choppy trading comes as traders wait for the Federal Reserve's latest monetary policy announcement.
The major averages have been bouncing back and forth across the unchanged line and are currently posting modest losses. The Dow is down 24.82 points or 0.2 percent at 12,812.51, the Nasdaq is down 2.41 points or 0.1 percent at 2,927.35 and the S&P 500 is down 3.36 points or 0.3 percent at 1,354.62.
The lackluster performance on Wall Street comes as many traders have moved to the sidelines ahead of the Fed announcement, which is due shortly.
The markets have recently benefited from optimism that the Fed will announce additional measures to stimulate the sluggish economy in light of a recent batch of disappointing U.S. economic data as well as the ongoing financial crisis in Europe.
Many analysts expect the Fed to announce an extension of "Operation Twist," which involves replacing short-term securities in the Fed's bond portfolio with longer-term securities in an effort to push already low long-term interest rates even lower.
Peter Boockvar, managing director at Miller Tabak, said, "Putting aside what they should do, what they will do is something, because the last thing they did is expiring."
"If twisting is all we get, if at all, stocks are a sell on the news, because I believe the only thing keeping this rally alive are the hopes and wishes for bailout/easing help," he added. "It is certainly not on the outlook for global economic growth."
Following the release of the statement, the Fed's revised economic forecasts may attract some attention along with Chairman Ben Bernanke's press conference.
In corporate news, shares of Procter & Gamble (PG) are down by 3.3 percent after the consumer products giant warned of weaker than previously expected fourth quarter results.
P&G attributed the downwardly revised guidance to slower than expected market growth rates, market share softness in developed regions and negative impacts from foreign exchange rate changes.
Adobe Systems (ADBE) has also moved to the downside after the software developer reported better than expected second quarter results but provided disappointing guidance.
Despite the lack of direction being shown by the broader markets, gold stocks are moving notably lower along with the price of the precious metal. With gold for August delivery falling $15.80 to $1,607.40 an ounce, the NYSE Arca Gold Bugs Index is down by 1.8 percent.
Trucking stocks have also come under pressure on the day, dragging the Dow Jones Trucking Index down by 1.1 percent. The loss by the index comes after it ended the previous session at its best closing level in well over a month.
While utilities and railroad stocks are also seeing moderate weakness in mid-day trading, strength is visible among tobacco, software and healthcare provider stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, benefiting from the overnight rally on Wall Street. Japan's Nikkei 225 Index surged up by 1.1 percent, while Hong Kong's Hang Seng Index rose by 0.5 percent.
The major European markets also moved to the upside over the course of the trading day. The U.K.'s FTSE 100 Index rose by 0.6 percent, the German DAX Index advanced by 0.5 percent, and the French CAC 40 Index edged up by 0.3 percent.
In the bond market, treasuries have moved notably lower ahead of the announcement from the Fed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.6 basis points at 1.666 percent.
by RTT Staff Writer
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