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Major Averages Close In Negative Territory - U.S. Commentary

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After seeing strength for much of the session, stocks pulled back late in the day to close moderately lower. The Dow pulled back off the record closing high set in the previous session.

The Dow fell by 109.41 points or 0.5 percent to 24,180.64, the Nasdaq edged down 13.15 points or 0.2 percent to 6,762.21 and the S&P 500 dipped 9.87 points or 0.3 percent to 2,629.57.

The lower close on Wall Street may have reflected concerns about the outlook for the Republican tax reform bill amid reports about disagreements over a corporate alternative minimum tax.

On the U.S. economic front, the Commerce Department released a report showing the trade deficit widened more than expected in the month of October.

The report said the trade deficit widened to $48.7 billion in October from a revised $44.9 billion in September. Economists had expected the deficit to widen to $47.5 billion.

A separate report from the Institute for Supply Management showed a bigger than expected slowdown in the pace of service sector growth in November.

The ISM said its non-manufacturing index dropped to 57.4 in November from 60.1 in October, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to dip to 59.0.

"The rate of growth has lessened in the non-manufacturing sector after two very strong months of growth," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

He added, "Comments from the survey respondents indicate that the economy and sector will continue to grow for the remainder of the year."

Steel stocks showed a significant move to the downside on the day, dragging the NYSE Arca Steel Index down by 2 percent.

Gold, utilities, railroad and housing stocks also saw notable weakness, while strength was visible among electronic storage and tobacco stocks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index slumped by 1 percent.

The major European markets also moved to the downside on the day. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index dipped by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries moved higher after initially showing a lack of direction. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, by 2.3 basis points to 2.356 percent.

Trading on Wednesday may be impacted by reaction to payroll processor ADP's report on private sector employment in the month of November.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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