Profit Taking Contributes To Pullback On Wall Street - U.S. Commentary

(RTTNews) - After seeing initial strength, stocks have turned lower over the course of morning trading on Wednesday. With the downturn on the day, the tech-heavy Nasdaq is pulling back off the record closing high it set in the previous session.

The major averages have climbed off their lows of the session but remain in negative territory. The Dow is down 18.41 points or 0.1 percent at 19,926.63, the Nasdaq is down 25.24 points or 0.5 percent at 5,462.20 and the S&P 500 is down 7.75 points or 0.3 percent at 2,261.13.

The pullback on the day may be partly due to profit taking, as some traders look to cash in on the recent strength in the markets.

Negative sentiment may also have been generated by a report from the National Association of Realtors unexpectedly showing a sharp pullback in U.S. pending home sales in the month of November.

NAR said its pending home sales index tumbled by 2.5 percent to 107.3 in November after inching up by 0.1 percent to a revised 110.0 in October.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The steep drop in pending home sales came as a surprise to economists, who had expected pending sales to climb by 0.5 percent.

With the unexpected decrease, the pending home sales index plunged to its lowest level since hitting 105.4 in January.

Nonetheless, trading activity has remained subdued, with some traders still away from their desks following Christmas and ahead of another three-day weekend for New Year's Day.

Semiconductor stocks have come under pressure on the day, dragging the Philadelphia Semiconductor Index down by 1.1 percent. The index is pulling back off yesterday's sixteen-year closing high.

Graphics chip maker Nvidia (NVDA) has helped to lead the sector lower, plunging by 4.7 percent after reaching a record closing high on Tuesday.

Natural gas, electronic storage, and biotechnology stocks are also seeing some weakness, although most of the major sectors are showing only modest moves.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Japan's Nikkei 225 Index closed just below the unchanged line and China's Shanghai Composite Index fell by 0.4 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index has climbed by 0.5 percent, the German DAX Index and the French CAC 40 Index are down by 0.1 percent.

In the bond market, treasuries are showing a lack of direction following the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.554 percent.