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U.S Stocks Regain Ground After Seeing Initial Weakness

wallstreet aug28 13nov19 lt

After coming under pressure at the start of trading, stocks have regained some ground over the course of morning trading on Wednesday. The major averages have climbed well off their lows of the session but remain in negative territory.

Currently, the major averages are posting modest losses. The Dow is down 16.54 points or 0.1 percent at 27,674.95, the Nasdaq is down 10.41 points or 0.1 percent at 8,475.68 and the S&P 500 is down 3.06 points or 0.1 percent at 3,088.78.

The initial weakness on Wall Street came amid renewed uncertainty about a potential U.S.-China trade deal after President Donald Trump failed to offer many details about the trade talks in a speech on Tuesday.

In remarks at the Economic Club of New York, Trump claimed the Chinese are "dying to make a deal" and an agreement is "close," although investors had been hoping for more substantive comments.

The president said a significant phase one trade deal with China "could happen soon" but stressed that he would only accept an agreement that is good for U.S. companies and workers.

Trump later denied that his trade war with China is hurting industry or causing uncertainty and threatened further increases in tariffs if a deal is not reached.

However, selling pressure waned as Federal Reserve Chairman Jerome Powell reiterated that the central bank is likely to leave interest rates unchanged in the near future.

Powell said in prepared remarks before the Congressional Joint Economic Committee that the current stance of monetary policy is likely to remain appropriate as long as incoming information about the economy remains broadly consistent with the Fed's outlook.

"Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely," Powell said.

He added, "This favorable baseline partly reflects the policy adjustments that we have made to provide support for the economy."

Trump renewed his attacks on the Fed during his remarks on Tuesday, claiming the economy and the markets would be even stronger if the central bank would take his advice and slash interest rates further.

In U.S. economic news, the Labor Department released a report showing consumer prices rose by slightly more than anticipated in the month of October.

The Labor Department said its consumer price index climbed by 0.4 percent in October after coming in unchanged in September. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, core consumer prices edged up by 0.2 percent in October after a 0.1 percent uptick in September. The uptick in core prices matched economist estimates.

Steel stocks have shown a notable move to the downside amid renewed uncertainty about a U.S.-China trade deal, with the NYSE Arca Steel Index falling by 1.2 percent.

Financial and oil service stocks are also seeing significant weakness, while gold stocks have shown a strong move to the upside along with the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.9 percent, while Hong Kong's Hang Seng Index plunged by 1.8 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has fallen by 0.5 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both down by 0.2 percent.

In the bond market, treasuries are extending the upward move seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3 basis points at 1.879 percent.

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