Plus   Neg

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


With an increase in treasury yields generating selling pressure, stocks have moved significantly lower in morning trading on Wednesday. The major averages have all moved to the downside after closing mixed for two straight days.

In recent trading, the major averages have climbed off their worst levels but remain firmly in the red. The Dow is down 257.51 points or 1 percent at 26,173.06, the Nasdaq is down 119.63 points or 1.6 percent at 7,618.39 and the S&P 500 is down 27.58 points or 1 percent at 2,852.76.

The sell-off on Wall Street comes as treasury yields moved higher following the release of the Labor Department's report on producer prices, adding to recent concerns about the outlook for interest rates.

The Labor Department said its producer price index for final demand increased by 0.2 percent in September after edging down by 0.1 percent in August. Economists had expected prices to rise by 0.2 percent.

Excluding decreases in prices for food and energy, core producer prices still rose by 0.2 percent in September after slipping by 0.1 percent in August. The uptick in core prices also matched economist estimates.

The report also said the annual rate of producer price growth slowed to 2.6 percent in September from 2.8 percent in August, although the annual rate of core producer price growth accelerated to 2.5 percent from 2.3 percent.

Traders are likely to keep an eye on the results of the Treasury Department's upcoming auctions of three-year and ten-year notes, which could also have an impact on treasury yields.

Semiconductor stocks have shown a substantial move to the downside in morning trading, dragging the Philadelphia Semiconductor Index down by 2.7 percent. With the drop, the index has fallen to a five-month intraday low.

Energy stocks have also come under pressure amid a decrease by the price of crude oil, moving notably lower along with steel, transportation, and networking stocks.

In overseas trading, stock markets across the Asia-Pacific region saw modest strength during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.2 percent, while Hong Kong's Hang Seng Index crept up by 0.1 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the U.K.'s FTSE 100 Index has slumped by 0.9 percent, the French CAC 40 Index and the German DAX Index are tumbling by 1.6 percent and 1.7 percent, respectively.

In the bond market, treasuries have climbed off their worst levels of the session but remain in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 3.227 percent.

For comments and feedback contact: editorial@rttnews.com

Follow RTT