U.S. Stocks Seeing Modest Weakness Amid Ongoing Interest Rate Worries

(RTTNews) - Stocks are seeing modest weakness during trading on Wednesday, with the major averages all moving to the downside following the mixed performance seen in the previous session.

Currently, the major averages are off their lows of the session but still in negative territory. The Dow is down 134.51 points or 0.4 percent at 33,954.76, the Nasdaq is down 23.32 points or 0.2 percent at 11,936.83 and the S&P 500 is down 15.95 points or 0.4 percent at 4,120.18.

The weakness on Wall Street reflects ongoing concerns about the outlook for interest rates following the release of upbeat retail sales data.

Before the start of trading, the Commerce Department released a report showing a substantial increase in U.S. retail sales in the month of January.

The report said retail sales spiked by 3.0 percent in January after tumbling by 1.1 percent in December. Economists had expected retail sales to jump by 1.8 percent.

Excluding a surge in sales by motor vehicle and parts dealers, retail sales still shot up by 2.3 percent in January after falling by a revised 0.9 percent in December.

Ex-auto sales were expected to increase by 0.8 percent compared to the 1.1 percent slump originally reported for the previous month.

The sharp increase in retail sales has led to concerns the Federal Reserve will be encouraged to continue aggressively raising interest rates in an effort to combat inflation.

"The data-dependent Fed is seeing its case for more ongoing rate increases get bolstered after both inflation accelerated and as retail sales rebound sharply in January," said Edward Moya, senior market analyst at OANDA.

Gold stocks have moved sharply lower on the day, with a steep drop by the price of the precious metal weighing on the sector.

With gold for April delivery tumbling $21.30 or 1.1 percent to $1,844.10 an ounce, the NYSE Arca Gold Bugs Index is down by 3.2 percent.

A notable decrease by the price of crude oil is also weighing on energy stocks, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index slumping by 2.2 percent and 2.0 percent, respectively.

Natural gas, semiconductor and software stocks are also seeing notable weakness, while housing stocks are moving higher following upbeat homebuilder confidence data.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index tumbled by 1.4 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

In the bond market, treasuries are extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.4 basis points at 3.795 percent.