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Stocks Fluctuate Wildly Before Closing Firmly Negative - U.S. Commentary

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Stocks fluctuated wildly over the course of the trading session on Wednesday after failing to sustain an initial move to the downside. The major averages pulled back firmly into negative territory in morning trading before staging an unsuccessful recovery attempt in the afternoon.

By the close of trading, the major averages were significantly lower once again. The Dow fell 205.99 points or 0.8 percent to 25,080.50, the Nasdaq tumbled 64.48 points or 0.9 percent to 7,136.39 and the S&P 500 slid 20.60 points or 0.8 percent to 2,701.58.

A continued decline by shares of Apple (AAPL) weighed on stocks on Wall Street, with the tech giant slumping by 2.8 percent to a four-month closing low.

Apple extended a recent downtrend after Guggenheim Partners downgraded its rating on the company's stock to Neutral from Buy amid expectations of a 5 percent drop in iPhone units sold in 2019.

Negative sentiment may also have been generated by comments by Congresswoman Maxine Waters, D-Calif., who is expected to take over the powerful House Financial Services Committee in the next Congress.

Ahead of testimony by Federal Reserve Vice Chairman for Supervision Randal Quarles, Waters suggested she would halt President Donald Trump's efforts to roll back banking regulations.

"Make no mistake, come January, in this committee the days of this committee weakening regulations and putting our economy once again at risk of another financial crisis will come to an end," Waters said.

Meanwhile, traders largely shrugged off a report from the Labor Department showing consumer prices increased in line with economist estimates in the month of October.

The Labor Department said its consumer price index rose by 0.3 percent in October after inching up by 0.1 percent in September. Economists had expected prices to climb by 0.3 percent.

Excluding food and energy prices, core consumer prices edged up by 0.2 percent in October after creeping up by 0.1 percent in September. The uptick in core prices also matched expectations.

The annual rate of consumer price growth accelerated to 2.5 percent in October from 2.3 percent in September, while the annual rate of core consumer price growth slowed to 2.1 percent from 2.2 percent.

Sector News

Biotechnology stocks moved sharply lower over the course of the trading day, extending the steep decline seen over the past several sessions.

Reflecting the weakness in the biotech sector, the NYSE Arca Biotechnology Index tumbled by 2.2 percent to its lowest closing level in seven months.

Significant weakness also emerged among utilities stocks, as reflected by the 1.5 percent slump by the Dow Jones Utilities Average.

Financial, retail, software, and natural gas stocks also saw considerable weakness, moving lower along with most of the other major sectors.

Meanwhile, gold stocks bucked the downtrend on the day, resulting in a 3.6 percent spike by the NYSE Arca Gold Bugs Index. The index bounced off a two-month closing low.

The rebound by gold stocks came amid an increase by the price of the precious metal, with gold for December delivery climbing $8.70 to $1,207.90 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday, although Japan's Nikkei 225 Index bucked the downtrend and edged up by 0.2 percent. China's Shanghai Composite Index slid by 0.9 percent, while Hong Kong's Hang Seng Index dropped by 0.5 percent.

The major European markets also moved to the downside over the course of the session. While the U.K.'s FTSE 100 Index dipped by 0.3 percent, the German DAX Index and the French CAC 40 Index slid by 0.5 percent and 0.7 percent, respectively.

In the bond market, treasuries moved higher over the course of the session after seeing initial weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped by 2.5 basis points to 3.120 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to a slew of U.S. economic news, including reports on retail sales, weekly jobless claims, regional manufacturing activity, and import and export prices.

On the earnings front, networking giant Cisco Systems (CSCO) is among the companies releasing their quarterly results after the close of today's trading.

Retail giant Walmart (WMT) is also among the companies due to report their results before the start of trading on Thursday.

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