U.S. Stocks Seeing Modest Weakness Amid Negative Reaction To Earnings
Stocks are seeing modest weakness during trading on Wednesday, with the major averages all moving lower after ending the previous session narrowly mixed. Selling pressure has remained somewhat subdued, however, limiting the downside.
Currently, the major averages are off their lows of the session but still in the red. The Dow is down 85.77 points or 0.3 percent at 33,890.86, the Nasdaq is down 29.36 points or 0.2 percent at 12,124.06 and the S&P 500 is down 7.41 points or 0.2 percent at 4,147.46.
The weakness on Wall Street partly reflects a negative reaction to some of the latest earnings news, with shares of Netflix (NFLX) moving sharply lower after the streaming giant reported weaker than expected first quarter revenues.
Financial giant Morgan Stanley (MS) has also moved to the downside on the day despite reporting first quarter results that exceeded analyst estimates.
Meanwhile, shares of Travelers (TRV) have surged after the insurance giant reported better than expected first quarter results.
Negative sentiment has also been generated in reaction to a jump in treasury yields, with the yield on the benchmark ten-year note reaching its highest levels in nearly a month.
The increase in treasury yields reflects concerns about global inflation after a report showed U.K. consumer prices increased more than expected in March.
Later in the day, the Federal Reserve is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.
Sector News
Networking stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 2.5 percent to its lowest intraday level in over three months.
Considerable weakness is also visible among computer hardware stocks, as reflected by the 2.4 percent slump by the NYSE Arca Computer Hardware Index. The index is pulling back off a two-month closing high.
Steel stocks are also seeing significant weakness on the day, resulting in a 2.2 percent drop by the NYSE Arca Steel Index.
Energy, semiconductor and gold stocks have also moved to the downside, while some strength has emerged among utilities stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index edged down by 0.2 percent, while South Korea’s Kospi crept up by 0.2 percent.
The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.3 percent.
In the bond market, treasuries have moved back to the downside following the uptick seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.5 basis points at 3.627 percent.
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