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U.S. Stocks Remain Firmly Negative After Early Pullback

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After coming under pressure early in the session, stocks remain mostly lower in afternoon trading on Wednesday. The major averages have all moved to the downside following the mixed performance seen in the previous session.

Currently, the major averages are off their lows of the session but still firmly negative. The Dow is down 170.34 points or 0.5 percent at 33,981.67, the Nasdaq is down 164.29 points or 1.3 percent at 12,938.26 and the S&P 500 is down 30.10 points or 0.7 percent at 4,275.10.

The pullback on Wall Street may partly reflect profit taking, as some traders cash in on the recent strength in the markets amid lingering concerns about the economy, inflation and interest rates.

While the Nasdaq edged lower on Tuesday, the Dow and the S&P 500 reached their best closing levels in almost four months.

A notable drop by shares of Target (TGT) is also weighing on Wall Street, with the discount retailer slumping by 2.9 percent on the day.

The pullback by Target comes after the company reported second quarter earnings that fell well short of analyst estimates, as it cut prices in an effort to reduce excess inventory.

Traders are also digesting a Commerce Department report showing U.S. retail sales came in flat in July amid pullbacks in gas station and auto sales.

The Commerce Department said retail sales were virtually unchanged in July after climbing by a downwardly revised 0.8 percent in June.

Economists had expected retail sales to inch up by 0.1 percent compared to the 1.0 percent jump originally reported for the previous month.

Excluding gas station and auto sales, retail sales rose by 0.7 percent in July, matching the increase seen in the previous month.

Shortly, the Federal Reserve is scheduled to release the minutes of its latest monetary policy meeting, potentially shedding additional light on the outlook for interest rates.

Sector News

Gold stocks continue to see substantial weakness in afternoon trading, resulting in a 3.2 percent nosedive by the NYSE Arca Gold Bugs Index.

The sell-off by gold stocks comes amid a decrease by the price of the precious metal, with gold for December delivery falling $14 to $1,775.70 an ounce.

Significant weakness also remains visible among semiconductor stocks, as reflected by the 3.2 percent plunge by the Philadelphia Semiconductor Index.

Airline stocks are also seeing considerable weakness on the day, dragging the NYSE Arca Airline Index down by 2.6 percent.

Steel, networking and computer hardware stocks have also shown notable moves to the downside, while oil stocks are among the few groups bucking the downtrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.2 percent, while China's Shanghai Composite Index rose by 0.5 percent.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index tumbled by 2 percent, the French CAC 40 Index slumped by 1 percent and the U.K.'s FTSE 100 Index fell by 0.3 percent.

In the bond market, treasuries remain firmly negative after moving notably lower in early trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 8.6 basis points at 2.910 percent.

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