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Major Averages Posting Modest Losses In Morning Trading - U.S. Commentary

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Stocks have moved modestly lower in morning trading on Thursday, giving back some ground following the rally seen in the previous session. The major averages have all moved to the downside, although selling pressure has remained somewhat subdued.

Currently, the major averages remain in negative territory, although the Dow is down just 7.25 points or less than a tenth of a percent at 26,173.05. The Nasdaq is down 18.58 points or 0.3 percent at 7,552.18 and the S&P 500 is down 5.48 points or 0.2 percent at 2,808.41.

Profit taking has contributed to the weakness on Wall Street after the strong gains posted in the previous session lifted the Dow and the S&P 500 to their best closing levels in nearly a month.

Traders seem reluctant to make more significant moves, however, looking ahead to the Federal Reserve's monetary policy announcement this afternoon.

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement may shed additional light on the anticipated rate hike in December.

CME Group's FedWatch tool indicates only a 7 percent chance the Fed will raise rates today but a 75 percent chance for a 25 basis point increase in rates next month.

On the U.S. economic front, the Labor Department released a report showing a slight decrease in initial jobless claims in the week ended November 3rd.

The report said initial jobless claims edged down to 214,000, a decrease of 1,000 from the previous week's revised level of 215,000.

Economists had expected jobless claims to dip to 213,000 from the 214,000 originally reported for the previous week.

Tobacco stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 3.7 percent. Earlier in the session, the index hit its lowest intraday level in two months.

Considerable weakness has also emerged among housing stocks, as reflected by the 2.8 percent slump by the Philadelphia Housing Sector Index.

Homebuilder D.R. Horton (DHI) is leading the housing sector lower after reporting fiscal fourth quarter earnings that matched analyst estimates but weaker than expected revenues.

Networking and oil service stocks are also seeing notable weakness in morning trading, while most of the other major sectors are showing only modest moves.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1.8 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index has risen by 0.4 percent, the French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.4 percent.

In the bond market, treasuries are showing a lack of direction ahead of this afternoon's Fed announcement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.221 percent.

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