WASHINGTON (dpa-AFX) - Reflecting renewed uncertainty about the outlook for interest rates, stocks have moved mostly lower during trading on Wednesday. The major averages have all moved to the downside, with the tech-heavy Nasdaq falling for the fourth consecutive session.
The major averages have climbed off their worst levels in recent trading but currently remain firmly in the red. The Dow is down 239.34 points or 0.6 percent at 37,475.70, the Nasdaq is down 101.93 points or 0.7 percent at 14,664.01 and the S&P 500 is down 27.63 points or 0.6 percent at 4,715.20.
The weakness on Wall Street may reflect concerns investors have become too optimistic about the likelihood of near-term interest rate cuts ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting later in the day.
Treasury yields are seeing further upside ahead of the release of the minutes amid worries Fed officials will signal a more cautious approach to future rate decisions.
The yield on the benchmark ten-year note is moving higher for the fourth consecutive session after falling to its lowest levels in over five months a week ago.
Ahead of the release of the minutes Richmond Federal Reserve Tom Barkin said the U.S. economy heading for a soft landing is 'increasingly conceivable but in no way inevitable.'
'The airport is on the horizon. But landing a plane isn't easy, especially when the outlook is foggy, and headwinds and tailwinds can affect your course,' Barkin said in prepared remarks to the Raleigh Chamber of Commerce: Launch 2024. 'It's easy to oversteer and do too much or understeer and do too little.'
Barkin also noted the U.S. economy continues to defy expectations, suggesting consumer spending is unlikely to pull back as long as equity values are high and the labor market remains tight.
'Longer-term rates have dropped recently, which could stimulate demand in interest-sensitive sectors like housing,' Barkin said. 'While you might think this would be a first-class problem, strong demand isn't the solution to above-target inflation. That's why the potential for additional rate hikes remains on the table.'
On the U.S. economic front, a report released by the Institute for Supply Management showed U.S. manufacturing activity contracted at a slightly slower rate in the month of December.
The ISM said its manufacturing PMI rose to 47.4 in December from 46.7 in November, but a reading below 50 still indicates contraction. Economists had expected the index to inch up to 47.1.
The Labor Department also released a report showing job openings in the U.S. edged down from an upwardly revised level in the month of November.
Sector News
Airline stocks are extending the steep drop seen over the two previous sessions, resulting in a 2.9 percent nosedive by the NYSE Arca Airline Index.
Substantial weakness is also visible among gold stocks, as reflected by the 2.8 percent slump by the NYSE Arca Gold Bugs Index.
The weakness among gold stocks comes amid a sharp decline by the price of the precious metal, with gold for February delivery tumbling $32.30 or 1.6 percent to $2,040.80 an ounce.
Housing, commercial estate and banking stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday, with the Japanese markets still closed. Hong Kong's Hang Seng Index fell by 0.9 percent, while South Korea's Kospi plunged by 2.3 percent.
The major European markets have also move to the downside on the day. While the French CAC 40 Index has tumbled by 1.9 percent, the German DAX Index is down by 1.7 percent and the U.K.'s FTSE 100 Index is down by 0.7 percent.
In the bond, treasuries are extending the downward move seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.6 basis points at 3.982 percent.
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