U.S. Stocks Regain Ground After Early Sell-Off

(RTTNews) - After moving sharply lower early in the session, stocks have shown a significant recovery attempt over the course of the trading day on Wednesday. The major averages have climbed well off their worst levels of the day, with the Dow briefly turning positive.

Currently, the major averages are all in negative territory. The Dow is down 61.76 points or 0.2 percent at 30,245.56, the Nasdaq is down 72.98 points or 0.7 percent at 11,103.43 and the S&P 500 is down 13.37 points or 0.4 percent at 3,777.56.

The early weakness on Wall Street came as traders looked to cash in on the strong gains posted early in the week amid lingering concerns about the outlook for the global economy.

Central banks around the world appear poised to continue raising interest in the months ahead, potentially tipping the global economy into a recession as they seek to combat elevated inflation.

A rebound by treasury yields also weighed on the markets, with the yield on the benchmark ten-year note regaining ground after moving notably lower over the two previous sessions.

Upbeat U.S. economic data has also added to worries the Federal Reserve will maintain its strategy of aggressively raising interest rates going into the end of the year.

Payroll processor ADP released a report showing private sector employment in the U.S. increased by slightly more than expected in the month of September.

ADP said private sector employment surged by 208,000 jobs in September after climbing by an upwardly revised 185,000 jobs in August.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 132,000 jobs originally reported for the previous month.

Meanwhile, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth in U.S. service sector activity in the month of September.

The ISM said its services PMI edged down to 56.7 in September from 56.9 in August, although a reading above 50 still indicates growth in the sector. Economists had expected the index to dip to 56.0.

Selling pressure has waned over the course of the session, however, as traders may feel the economic worries have already been priced into the markets.

Sector News

Despite the recovery attempt by the broader markets, telecom stocks continue to see substantial weakness, resulting in a 2.9 percent dive by the NYSE Arca North American Telecom Index.

Interest rate-sensitive utilities and commercial real estate stocks have climbed off their worst levels but also remain sharply lower, with the Dow Jones U.S. Real Estate Index and the Dow Jones Utility Average plunging by 2.5 percent and 2.2 percent, respectively.

Gold stocks also continue to see considerable weakness amid a decrease by the price of the precious metal, as reflected by the 2.5 percent slump by the NYSE Arca Gold Bugs Index.

Notable weakness also remains visible among banking, airline and chemical stocks, while energy stocks have moved sharply higher amid an increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index spiked by 5.9 percent.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index slumped by 1.2 percent, the French CAC 40 Index slid by 0.9 percent and the U.K.'s FTSE 100 Index fell by 0.4 percent.

In the bond market, treasuries continue to see substantial weakness after pulling back sharply in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 15 basis points at 3.767 percent.