Stocks Stuck In Negative Territory In Mid-Day Trading - U.S. Commentary

(RTTNews) - While selling pressure has remained relatively subdued, stocks are seeing modest weakness in mid-day trading on Wednesday. The drop on the day comes after the tech-heavy Nasdaq ended the previous session at a record closing high.

Currently, the major averages remain stuck in negative territory. The Dow is down 17.65 points or 0.1 percent at 19,927.39, the Nasdaq is down 24.50 points or 0.5 percent at 5,462.94 and the S&P 500 is down 8.38 points or 0.4 percent at 2,260.50.

The weakness on Wall Street 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.

Sector News

Most of the major sectors are showing only modest moves on the day, although considerable weakness has emerged among natural gas stocks. Reflecting the weakness in the sector, the NYSE Arca Natural Gas Index is down by 1.3 percent.

The decline by natural gas stocks comes even though the price of natural gas is nearly flat on the day, with natural gas for February delivery slipping $0.003 to $4.763 per million BTUs.

Semiconductor stocks are also seeing notable weakness, resulting in a 1.1 percent drop by the Philadelphia Semiconductors Index. The index is pulling back off yesterday's sixteen-year closing high.

Graphics chip maker Nvidia (NVDA) has helped to lead the sector lower, slumping by 4.4 percent after reaching a record closing high on Tuesday.

Oil service and biotechnology stocks have also moved to the downside, while some strength is visible among gold stocks.

Other Markets

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 largely showed a lack of direction on the day. While the U.K.'s FTSE 100 Index climbed by 0.5 percent, the German DAX Index and the French CAC 40 Index both ended the day nearly unchanged.

In the bond market, treasuries have moved modestly higher 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 1.6 basis points at 2.547 percent.