WASHINGTON (dpa-AFX) - After kicking off the new year on a downbeat note, stocks saw further downside over the course of the trading session on Wednesday. The major averages all fell on the day, with the tech-heavy Nasdaq closing lower for the fourth consecutive session.
The major averages dropped to new lows for the session going into the close of trading. The Nasdaq slumped 173.73 points or 1.2 percent to 14,592.21, the Dow slid 284.85 points or 0.8 percent to 37,430.19 and the S&P 500 fell 38.02 points or 0.8 percent to 4,704.81.
The continued weakness on Wall Street partly reflected concerns investors have become too optimistic about the likelihood of near-term interest rate cuts.
Stocks saw some further downside as the minutes of the Federal Reserve's latest monetary policy meeting reiterated officials widely expect to begin lowering rates in 2024, but they also highlighted an 'unusually elevated degree of uncertainty' about the outlook.
Projections provided by Fed officials at the December 12-13 meeting suggested three quarter point rate cuts by the central bank are likely by the end of 2024.
The forecasts were backed up by the minutes, which said baseline projections implied that a lower target range for the federal funds rate would be appropriate by the end of 2024.
However, the minutes said participants also noted an unusually elevated degree of uncertainty and that it was possible further rate increases could be appropriate.
Several participants also observed that circumstances might warrant keeping rates at current levels for longer than they currently anticipated, the minutes said.
The Fed's next monetary policy meeting is scheduled for January 25-26, with the central bank widely expected to leave interest rates unchanged.
Meanwhile, CME Group's FedWatch Tool currently indicates there is a 64.8 percent chance the Fed could lower rates by a quarter point at its following meeting in March.
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 extended the sharp pullback seen over the two previous sessions, resulting in a 4.1 percent nosedive by the NYSE Arca Airline Index.
Substantial weakness was also visible among gold stocks, as reflected by the 2.6 percent slump by the NYSE Arca Gold Bugs Index.
The sell-off by gold stocks came amid a steep drop by the price of the precious metal, with gold for February delivery tumbling $30.60 or 1.5 percent to $2,042.80 an ounce.
Commercial real estate, semiconductor and housing stocks also saw considerable weakness on the day, while oil producer and pharmaceutical stocks bucked the downtrend.
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 slid by 0.9 percent, while South Korea's Kospi plunged by 2.3 percent.
The major European markets also move to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the German DAX Index and the French CAC 40 Index tumbled by 1.4 percent and 1.6 percent, respectively.
In the bond, treasuries showed a significant rebound over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.9 basis points to 3.907 percent after reaching a high of 4.008 percent.
Looking Ahead
Reports on private sector employment and weekly jobless claims are likely to attract attention on Thursday, although trading activity may be somewhat subdued ahead of the release of the Labor Department's more closely watched monthly jobs report on Friday.
Copyright(c) 2024 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2024 AFX News
