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Major Averages Turning In Mixed Performance In Mid-Day Trading - U.S. Commentary


Stocks have turned mixed over the course of the trading session on Wednesday after ending the previous session mostly higher. While the Dow has climbed firmly into positive territory, the Nasdaq remains in the red.

Currently, the Dow is up 111.92 points or 0.4 percent at 26,082.98, while the Nasdaq is down 50.38 points or 0.6 percent at 7,922.09 and the S&P 500 is down 1.77 points or 0.1 percent at 2,886.12.

The mixed performance on Wall Street comes after a report from Dow Jones said the United States is proposing a new round of trade talks with China in the near future.

The drop by the Nasdaq reflects weakness among technology stocks, with considerable weakness visible among semiconductor stocks. Reflecting the weakness in the semiconductor sector, the Philadelphia Semiconductor Index is down by 2.2 percent.

Micron Technology (MU) is leading the semiconductor sector lower after Goldman Sachs downgraded its rating on the chipmaker's stock to Neutral from Buy.

Considerable weakness is also visible among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index sliding by 1.5 percent and 1.1 percent, respectively.

Telecom stocks are also seeing significant weakness on the day, while considerable strength has emerged among gold, energy, and steel stocks.

On the U.S. economic front, the Labor Department released a report unexpectedly showing a modest drop in producer prices in the month of August.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after coming in unchanged in July. Economists had expected prices to rise by 0.2 percent.

Excluding food and energy prices, core producer prices still edged down by 0.1 percent in August following a 0.1 percent uptick in July. Core prices had been expected to increase by 0.2 percent.

Later in the day, trading may be impacted by reaction to the release of the Federal Reserve's Beige Book.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, may provide further clues about the outlook for interest rates.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both fell by 0.3 percent.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index jumped by 1 percent, the German DAX Index and the U.K.'s FTSE 100 Index rose by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries are regaining ground after moving notably lower in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 2.963 percent.

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