Dow Little Changed As Fed Announcement Looms, Nasdaq Firmly Negative

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After moving to the downside early in the session, stocks remain mostly lower in afternoon trading on Wednesday. While the Dow as climbed well off its worst levels, the tech-heavy Nasdaq remains firmly in negative territory.

The Dow briefly turned positive in recent trading but is currently down 16.10 points or 0.1 percent at 35,528.08. The Nasdaq is down 124.58 points or 0.8 percent at 15,113.06 and the S&P 500 is down 9.41 points or 0.2 percent at 4,624.68.

The weakness on Wall Street comes as traders look ahead to the Federal Reserve's highly anticipated monetary policy announcement this afternoon.

With recent data showing inflation at persistently elevated levels, Fed is widely expected to accelerate its timetable for reducing bond purchases.

Reports suggest the Fed could double the rate it is reducing its asset purchases to $30 billion per month from the $15 billion per month announced at its previous meeting in November.

Many traders expect the Fed to begin raising interest rates shortly after bringing its asset purchase program to a halt next year.

Concerns the Fed may be scaling back stimulus at a time economic growth is slowing may be weighing on the markets after the Commerce Department released a report showing retail sales rose by much less than expected in November.

The Commerce Department said retail sales edged up by 0.3 percent in November after soaring by an upwardly revised 1.8 percent in October.

Economists had expected retail sales to increase by 0.8 percent compared to the 1.7 percent spike originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales still rose by 0.3 percent in November after surging by 1.8 percent in October. Ex-auto sales were expected to jump by 1.0 percent.

Sector News

Steel stocks continue to see substantial weakness in afternoon trading, resulting in a 3.3 percent nosedive by the NYSE Arca Steel Index.

Significant weakness is also visible among gold stocks, as reflected by the 3.1 percent slump by the NYSE Arca Gold Bugs Index.

The sell-off by gold stocks comes amid a modest decrease by the price of the precious metal, with gold for February delivery slipping $6.20 to $1,766.10 an ounce.

Oil service and airline stocks are also seeing considerable weakness on the day, while Eli Lilly (LLY) is leading the pharmaceutical sector higher after providing upbeat guidance.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while China's Shanghai Composite Index fell by 0.4 percent.

The major European markets also finished the day mixed. While the U.K.'s FTSE 100 Index slid by 0.7 percent, the German DAX Index edged up by 0.2 percent and the French CAC 40 Index rose by 0.5 percent.

In the bond market, treasuries are seeing modest weakness ahead of the Fed announcement. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.2 basis points at 1.450 percent.

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